USD/JPY tumbles below 110.90 to fresh weekly lows

The Japanese yen gained momentum during the last hours as equity prices in Wall Street consolidate in negative territory and amid a recovery in Treasuries. 

The Dow Jones is falling 0.20% and the Nasdaq declines 0.10%. In the bond market, the 10-year yield dropped to 2.227%, the lowest in a week. 

USD/JPY fails to hold after US data

After the release of US economic data, the pair climbed to 111.25. It failed to keep the strength and pulled back toward 110.90. Recently it broke under that area and tumbled to 110.64, the lowest since May 18. 

At the moment it trades at 110.70/80, headed toward the lowest daily close in a month. 

US: Personal income increased $58.4 billion (0.4%) in April 

US: Data suggests greater momentum behind consumer spending - Wells Fargo

Technical outlook 

“The 4 hours chart shows that the price remains well below its moving averages, with the 100 SMA slowly gaining downward strength, whilst the Momentum indicator aims north around its mid-line, but the RSI indicator remains flat around 41, this last anticipating some additional declines on a break below the mentioned daily low, with scope then to extend its slide down to 110.00”, said Valeria Bednarik, Chief Analyst at FXStreet. 

The pair is under pressure and a bounce back above 111.00 could reduce the bearish momentum. The key resistance in the short-term is seen around 111.20/30, where a downtrend from last week highs is currently located.