USDJPY WEAKNESS PERSISTS AS INTRADAY GAINS ARE ERASED

The USDJPY pair has surrendered all the early gains made in the Asian and European sessions, as sellers once again take control of the pair, printing yet another USDJPY monthly price low at 109.11. The tepid recovery this morning reached 109.63, and has now retraced back towards the 109 handle, breaking the former low at 109.23.

Further U.S dollar selling across the board has helped drive the USDJPY lower, with increasing nervousness setting in for financial markets, ahead of former FBI Director James Comey's testimony on Thursday, which is also helping to underpin overall Japanese Yen buying demand.

The downside looks increasingly ominous for the USDJPY pair, with scant support to be found below the 109 level. The first line of defense is the weekly timeframe 50-period moving average at 108.80.

Below 108.80, the April trading low offers limited support at 108.13, with further support coming in at the November 2016 trading low, someway down at 106.73.

Only a clear break above the daily high at 109.63 can relieve short-term selling pressures for USDJPY, with a daily price close above 111.22 needed to change the medium term bearish outlook for the pair.