USD/JPY drops sharply to test 117.50 as USD retreat extends

The USD/JPY pair faced strong offers once again above 118 handle, and from there resumed the downslide, mainly driven by extension of the corrective mode in the US dollar against its main peers.

USD/JPY awaits US data for fresh impetus

The dollar-yen pair came under intense selling pressure post-Tokyo open as the greenback slipped further this session and moved away from fresh fourteen-year tops reached against a basket of major currencies yesterday.

Moreover, subdued trading seen around the Japanese stocks also failed to buoy the sentiment around the USD/JPY.  The major is last seen changing hands around 117.62, retreating slightly from daily lows hit at 117.55, still down -0.20% on the day.

Amid a fairly quiet economic calendar and thin volumes ahead of the holiday season, the spot will remain at the mercy of the USD dynamics and RO-RO trends. While the US existing home sales release may provide some incentive to the pair.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 118.07 (daily high). A break above the last, the major could test 118.43 (Dec 16 high) and 118.67 (10-month highs) beyond the last. While to the downside, the immediate support is seen at 117.50 (psychological levels) next at 117.12 (daily S1) and below that at 116.93 (10-DMA).