USD/JPY extends slide to the 109.35 area

• US Dollar drops into the London fix, DXY falls to 89.81.
• USD/JPY corrects further lower after being rejected from above 110.00.

The USD/JPY broke below 109.60 and tumbled to 109.34, reaching the lowest level since Thursday. As of writing, it is trading slightly below 109.50, down 35 pips for the day.

The correction on Monday takes place after the US dollar was rejected from above 110.00. On Friday it peaked at 110.19, before bouncing to the downside. On Monday, price action remains limited amid a holiday in the US. Over the last hour, the greenback dropped across the board into the London fix.

Volatility is expected to remain low ahead of the Asian session. On Tuesday, the economic calendar shows PMIs as the key event of the day; regarding the week, attention is set on Friday’s NFP.

Economic numbers from the US are having a large impact on US yields, hence affecting USD/JPY. The 10-year yield closed lower last week below 1.60% and weighed on the greenback.

On the downside, the immediate support in USD/JPY is the 109.30 level followed by 109.00/05. On the upside, now 109.60 is a resistance level and then 109.75 before the 110.00 area.

Technical levels