USD/JPY tests daily lows at 110.70

USD/JPY is consolidating losses and continues to trade near daily lows. The Japanese currency is the best performer in the currency market supported by risk aversion and falling bond yields. 

The pair bottomed at 110.72 at the beginning of the American session and then bounced modestly to the upside. The recovery from the lows was capped by 111.20 and the pair dropped back toward the 110.80 zone, where currently trades, almost two hundred pips below the level it had at the beginning of the week. 

USD/JPY is falling for the seventh day in a row and is headed toward the lowest daily close since November 22. 

Technical levels 

To the downside, support levels might be located at 110.70/75 (daily low), 110.45 and 109.80 (Nov 16 high). On the upside, resistance might be seen at 111.00, 111.21 (American session high) and 115.55 (Feb 6 & 8 low).