USD/JPY drops to fresh session low amid risk-off mood

The USD/JPY pair ran through some fresh offers on Tuesday and dropped closer to weekly lows touched on Monday.

After yesterday's failed attempt to clear the 50-day SMA important barrier, disappointing release of Chinese trade balance data triggered a fresh wave of risk-off trade on Tuesday and has been a key factor weighing on the pair. Deteriorating investors' risk-appetite boosted the Japanese Yen's safe-haven appeal, eventually attracting some fresh selling pressure around the major. 

Meanwhile, a subdued action around the US treasury bond yields, failing to provide an fresh bullish impetus to the US Dollar, also failed to lend any immediate downslide support.

On the economic data front, the Japanese quarterly GDP growth for Q4 was finalized at 0.3% q-o-q, up from 0.2% reported early but missing expectations of 0.4% growth. A slightly lower-than-expected revision extended little support to the major, with broader market risk-sentiment being an exclusive driver of the pair's movement on Wednesday. 

The pair is now approaching weekly lows support near 113.55 level, touched on Monday, as investors now look forward to the US economic docket, featuring the release of the ADP jobs report and revised nonfarm productivity data, for fresh impetus. 

Technical levels to watch

Bears would be aiming for a decisive break below 113.55-50 immediate support, below which the pair is likely to extend the rejection move towards 113.25-20 horizontal support en-route 112.90-85 strong support area. 

On the upside, momentum above 113.90-114.00 region might continue to confront strong resistance at 50-day SMA near 114.10 region, which if cleared decisively is likely to trigger a short-covering rally towards beyond mid-114.00s towards testing Friday's two-week high resistance near 114.75 level.