USD/JPY bears flirting with multi-week lows, eyeing a sustained break below 106.00 mark
- USD/JPY witnessed some heavy selling for the fourth straight session on Wednesday.
- The intraday bearish trajectory seemed rather unaffected by notable USD demand.
- Worsening US-China relations seemed to be a key factor exerting pressure on the pair.
The USD/JPY pair refreshed multi-week lows in the last hour, with bears now looking to extend the downward trajectory further below the 106.00 mark.
The pair added to this week's losses and remained under some heavy selling pressure for the fourth consecutive session on Wednesday. The downward trajectory seemed rather unaffected by some strong follow-through US dollar buying.
The greenback maintained its bid tone and had a rather muted reaction to the latest ADP report, which showed that private-sector employment declined by 20.236 million in April as compared to the previous month's downward revised reading of -149K.
Meanwhile, the downtick lacked any fresh catalyst and could be solely attributed to worsening US-China relations, especially after the US President Donald Trump threatened to cancel phase-one trade deal and impose fresh tariffs on Chinese goods.
This comes on the back of a spat over the origin of the coronavirus. This coupled with a modest intraday pullback in the US equity markets benefitted the Japanese yen's safe-haven demand and added to the pair's intraday bearish pressure.
Apart from this, Wednesday's downfall could further be attributed some follow-through technical selling below a horizontal support near mid-106.00s. Hence, a subsequent slide below the 106.00 mark might now be seen as a fresh trigger for bearish traders.
Technical levels to watch