USD/JPY reverses course, turns negative on the day below mid-111s
After reaching a fresh session top at 111.74, the USD/JPY started to give back its daily earnings and fell 50 pips to 111.24 in the late US afternoon. As of writing, the pair is trading at 111.36, down 0.1% on the day.
The recent USD sell-off seems to the primary reason behind the pair's drop. Although the US Dollar Index was able to float in the positive area for the majority of the day, it came under a fresh selling pressure in the second half of the NA session after the U.S. Treasury-bond yields started to erase their daily gains. At the moment, the DXY is at 97.22, down 0.18% on the day. Moreover, major equity indexes in the U.S. are headed for a negative close for the second straight session, suggesting that investors are staying away from riskier assets.
However, this move seems to be technical in nature as it was not supported by a fundamental development and is unlikely to sustain. There are no relevant macro data to be released from Japan in the Asian session on Thursday and participants will follow FOMC member Powell's speech in the NA session after the weekly jobless claim numbers from the U.S., which are expected to increase to 240K from 237K for the week ending June 16.
Technical outlook
The fact that the pair failed to hold above the 50 and 100-DMA's on Wednesday suggest that further losses are likely in the short-term. A daily close above 111.60 (100-DMA) could help the pair rise toward 112.15 (200-DMA) and 112.75 (May 17 high). On the downside, support could be seen at 111.05/00 (daily low/psychological level), 110.50 (20-DMA) and 110 (psychological level).
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