USD/JPY plummets below 109.00 mark, back closer to multi-month lows

The Japanese Yen continues to benefit from global flight to safety, with the USD/JPY pair gravitating below the 109.00 handle to fresh weekly lows.

The pair remained under intense selling pressure for the third consecutive session and has now retreated over 200-pips from the 111.00 neighborhood touched on Wednesday. A fresh wave of global risk aversion trade, as depicted by weaker trading sentiment around global equity markets and further reinforced by sliding Treasury bond yields, provided a boost to the Japanese Yen's safe-haven appeal.

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Adding to this, persistent US Dollar selling bias, amid growing political tensions and fading prospects of any additional Fed rate hike action in 2017, further collaborated to the pair's slump back closer to multi-month lows touched last Friday in the aftermath of dismal US CPI print.

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On the economic data front, the release of Prelim UoM Consumer Sentiment Index for August is unlikely to provide any immediate respite for the USD bulls, while Dallas Fed President Robert Kaplan's speech might provide some trading impetus. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The 4 hours chart shows that the pair keeps retreating from a bearish 100 SMA after meeting selling interest on an attempt to surpass it earlier this week, whilst technical indicators head firmly lower within oversold territory. The pair is down, not only on risk aversion but also on dollar's self weakness, which means that any bounce will likely be temporal, and attract selling interest, while a break below 108.80, June's low and the immediate support, will favor a steady decline towards the 108.10 price zone."