USD/JPY slides back closer to multi-month lows, around mid-105.00s

   •  Reviving global trade war fears prompt aggressive USD selling.
   •  Risk-off mood boosts JPY’s safe-haven demand.
   •  US ADP report eyed for some fresh impetus.

The USD/JPY pair came under some intense selling pressure on Wednesday and dropped back to mid-105.00s, back closer to the recent multi-month lows. 

White House economic adviser Gary Cohn's resignation on Tuesday revived global trade war fears and offset the latest positive geopolitical development, wherein North Korea was reportedly said to be ready for talks with the US about ending its nuclear ambitions. 

The announcement dampened investors' confidence and prompted some aggressive US Dollar selling. This coupled with a fresh wave of global risk aversion trade underpinned the Japanese Yen's safe-haven appeal and further collaborated to the pair's heavily offered tone.

Meanwhile, the market seems to have largely ignored today's slightly weaker than expected release of Japanese leading indicators index, with the prevalent risk-off environment and renewed USD selling acting as key determinants of the pair's bearish momentum on Wednesday.

Later during the early NA session, the release of US private sector employment details - ADP report, would influence the USD price dynamics and should provide some fresh impetus.

Technical outlook

“A break below 105.00 would expose support at 104.13 (April 2014 high) and 103.74 (May 2013 high). However, the dip could be short-lived as Japanese insurers could buy dollars below 105.00”, writes Omkar Godbole, Analyst and Editor at FXStreet. 

“On the higher side, a daily close above 106.85 (falling channel resistance) would indicate a short-term bearish-to-bullish trend change and could yield test of resistances at 107.90 (Feb. 21 high) and descending 50-day moving average (currently seen at 108.61)”, he adds further.