USD/JPY on offers for second straight session, holds weaker below 110.00 mark

The USD/JPY pair extended previous session's sharp retracement from the vicinity of 111.00 level and remained under some selling pressure for the second consecutive day on Thursday.

The pair slipped further below the key 110.00 psychological mark and reversed majority of Tuesday's strong gains led by upbeat US monthly retail sales data. Persistent greenback selling bias, with the US Dollar Index extending overnight sharp drop from 3-week highs, has been one of the key factors weighing on the major. 

The latest political drama in the White House, following by perceived dovish FOMC meeting minutes continued attracted some fresh selling pressure around the buck and failed to assist the pair to build on its recent recovery move from near 4-month lows touched last Friday.

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Meanwhile, a modest pullback in global equity markets, pointing to a slight deterioration in investors' risk appetite, was also seen supporting the Japanese Yen's safe-haven appeal and further collaborated to the pair's fall to the 109.65 region.

Today's US economic docket, featuring the release of weekly jobless claims, Philly Fed Manufacturing Index and industrial production data, would now be looked upon for some immediate respite for the USD bulls. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "A break above the Asian session high of 110.21 would add credence to the bull trap argument made by the resilient yield spread and the risk reversal and shall open doors for the inverse head and shoulders neckline hurdle of 110.92. An end of the day close above 110.92 would mean the sell-off from the high of 114.49 has ended at 108.73 [Aug 11 low]."

"The spot could then proceed to test supplies around 103.11 [inverse head and shoulders target as per the measured height method]. On the downside, a daily close below 109.50 [trend line support] would revive the bearish view" he added.