USD/JPY slides to 100.50 amid risk-off sentiment

Having faced rejection just above 101.00 handle, the USD/JPY pair ran through fresh offers and has now dropped to session low near mid-100.00s.

The Japanese Yen is benefitting from the prevalent bearish sentiment in European equities. Comments from BOJ Governor Kuroda that the central could deepen negative rates, or do more QE, if needed, failed to weaken the Yen and snapped the pair's two consecutive days of tepid recovery trend from the very important 100.00 psychological mark touched in the aftermath of BOJ and Fed disappointment. 

Later during NA trading session, new home sales data from the US, ahead of BOJ monetary policy meeting minutes during early Asian session on Tuesday, would be looked upon for some respite, while the broader trend would continue to be driven by sentiment surrounding riskier assets - like equities.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Dollar’s retreat from Friday’s close of 101.08 suggests the correction from the multi-week low of 100.10 may have ended and prices could revisit 100.00 levels if the support at 100 .71 is breached on the hourly closing basis."

"Bears should watch out for a bullish inverted hammer candle on the hourly chart with lower shadow below 100.71. Such a formation would shift risk in favor of a break above Friday’s close of 101.08 and a rise to weekly pivot level of 101.32."

"On a larger scheme of things, bearish invalidation is seen only if prices breach descending trend line drawn from Sep 2 high & Sep 14 high."