USD/JPY slides back closer over 4-month lows touched earlier

The USD/JPY pair stalled its modest recovery attempt just ahead of the 109.00 handle and is now headed to the lower end of the daily trading range. 

The pair remained heavily offered through early European session and is currently trading around 108.45-40 band, just a few pips away from over 4-month lows touched earlier during the Asian session. A combination of global risk aversion trade and broad based greenback selling bias was seen weighing heavily on the major. 

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N. Korea’s ballistic missile launch over Japanese territory reignited geopolitical tensions and boosted demand for traditional safe-haven assets, including the Japanese Yen. This coupled with the highly bearish sentiment surrounding the USD, with the key US Dollar Index sinking to its lowest level since January 2015 further collaborated to the pair's slide back closer to yearly lows touched in April.

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Today's US economic docket features the release of CB Consumer Confidence Index and would be looked upon for some immediate respite for the USD bulls. 

Technical levels to watch

Immediate support is pegged near 108.30-25 area, below which the slide could get extended even below the 108.00 handle towards 107.80-75 support (Nov. 15, 2016, lows). On the upside, any recovery attempts might continue to confront fresh supply near the 109.00 round figure mark, which if cleared might trigger a short-covering rally towards 109.60-65 horizontal resistance en-route the key 110.00 psychological mark.