USD/JPY extends the drop below 111 handle

A renewed rally in the USD/JPY pair lost legs ahead of 111 handle, sending the rate back around the upper-bound of 110 barrier, where it traded during the late-Asian session.

USD/JPY drops back towards 5-DMA at 110.73

The bears fought back control soon after the European open, prompting a renewed sell-off in the USD/JPY pair below 111 handle. The major came under fresh selling pressure as the treasury yields accelerated losses across the curve, and weighed down on the greenback against its main competitors.

However, further downside remains capped amid a slightly upbeat risk sentiment as both oil and stocks continue to trade in the positive territory, while dust settles over the 7.4m Japanese earthquake news.

The major is last seen exchanging hands at fresh session lows of 110.68, down -0.14% on the day, extending retreat from daily highs reached at 111.23.

All eyes now remain on the US existing home sales data due later in the NA session, while the main risk event for the major this week remains the FOMC minutes due out late-Wednesday.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 111.00 (round number). A break above the last, the major could test 111.46 (May high) and 112 (zero figure) beyond the last. While to the downside, the immediate support is seen at 110.28 (daily low) next at 110.36 (daily S1) and below that at 110 (key support).

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