USD/JPY struggling to pull away from 4-month lows

The USD/JPY is having a difficult time erasing its daily losses as the selling pressure on the greenback remains persistent. After dropping to 110.10 in the European morning, the USD/JPY corrected to 110.40 but couldn't extend this move as another broad based US Dollar sell-off was triggered at the beginning of the NA session.

Furthermore, the widespread risk-aversion is also allowing the JPY to gather strength as a traditional safe-haven, limiting the dismal gains even further. At the first trading day of the week, major US stock indexes are feeling the impact of the US president Donald Trump's failure to replace Obamacare. 

• US: Trump Slump? – BMO CM
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As of writing, the Dow Jones Industrial Average is losing 132 points, or 0.65%, while the broader S&P 500 is down 16.5 points at 2,327.75. Also, the US 10-year bond yield is losing more than 1.5% on the day, collaborating with the selling mood around the greenback 

A scheduled speech by the Chicago Fed President Charles Evans is the only event left in the day. However, general market sentiment should continue to drive the price action.

Technical outlook

At the moment, the USD/JPY is losing 0.88% at 110.35 and facing the first resistance at 110.60 (daily high) followed by 111.00 (psychological level) and 111.50 (Mar. 24 high). On the downside, a break below 110.10/00 (daily low/psychological level) could target 109.35 (Nov. 15 high) and 108.75 (Nov. 17 low).