USD/JPY plummets to fresh two-week lows as USD selling remains unabated

The USD/JPY pair lost one big figure from weekly highs touched during Asian session on Friday and tumbled to fresh two-week lows near mid-110.00s on dismal US jobs data.

Spot came under intense selling pressure during early NA session after the headline NFP came-in to show addition of 138K new jobs during May. The reading was well below market expectations and last month's figures were also revised sharply lower. 

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The dismal data might not be enough for the Fed to refrain from raising interest rates on June 14 but definitely seems to have dampened expectations for faster Fed rate-tightening cycle through 2017. The same is evident from plunging US treasury bond yields, which further aggravated the selling pressure and dragged the pair to its lowest level since May 18.

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Against the backdrop of today's sharp reversal, a subsequent break below over one-month lows support near 110.25 level would confirm a fresh bearish break down and pave way for continuation of the pair's downward trajectory.

Technical levels to watch

The ongoing bearish pressure seems strong enough to drag the pair towards 110.25 support, which if broken is likely to accelerate the slide towards 109.75 intermediate support en-route 109.30-25 support area.

On the upside, any recovery attempts might now confront immediate resistance near 110.70-75 region, above which a bout of short-covering could lift the pair back above the 111.00 handle towards testing its next resistance near 111.35 level.