USD/JPY hits 19-week low of 109.92

• USD/JPY drops below 110.00 as USD sell-off continues.
• Treasury yields retreat from multi-year highs.
• Strong Japanese data & trade row adds to bearish pressure around USD/JPY.

USD/JPY fell below 110.00 for the first time since September, tracking the broad-based USD weakness in Asia.

The American dollar finds no takers amid rising EUR/USD pair and possibly due to concerns that Sino-US trade row may escalate due to a breakdown in communication between the US and China.

Also, the Treasury yields have backed-off from multi-year highs. For instance, the 10-year yield is trading at 2.617 percent - down more than 4 basis points from 2.665 percent (highest since 2014).

Meanwhile, the Japanese trade data and flash manufacturing PMI released today puts a question mark on the BOJ's decision to keep monetary policy accommodative. More importantly, the flash PMI showed a pickup in inflationary pressures. This seems to have put a bid under JPY.

It is worth noting that USD/JPY was already trading on the back foot, courtesy of a downside break of the symmetrical triangle (bearish continuation pattern) as discussed yesterday.

USD/JPY Technical Levels

As of writing, the pair is trading at 109.94 levels. A break below 109.88 (weekly 100-MA) would open up downside towards 109.07 (76.4% Fib R of Sep-Nov rally). Multiple daily closes below 109.07 could yield sustained move lower to 108.13 (April 2017 low).

On the other hand, a move above 110.15 (61.8% Fib R of Sep-Nov rally) would expose resistance at 110.84 (November low) and 111.00 (zero levels).