USD/JPY flirting with session lows, around 109.30 level

Having touched a four-day high level of 109.83, the USD/JPY pair ran through some fresh offers and has now dropped to fresh session lows in the region of 109.40-30 band. 

The pair failed to build on overnight strong recovery move and changed course amid renewed safe-haven demand after the US President Donald Trump threatened a government shutdown if Congress doesn't fund for a proposed border wall with Mexico. 

   •  USD/JPY still under pressure below 110.00 – UOB

The Japanese Yen got an additional boost from today's better-than-expected Japanese manufacturing PMI, coming in at 3-month high level of 52.8, and further collaborated to the pair's sharp pullback from just ahead of the key 110.00 psychological mark. 

Meanwhile, a lack of any strong follow through US Dollar buying interest also did little to lend any support, while the prevalent cautious sentiment around European equity market remained supportive of the global flight to safety, with the pair struggling to attract any fresh buying interest at lower levels. 

Despite the pullback, the pair has held well above a four-month low of 108.60 touched last Friday as investors seemed reluctant to place aggressive bets ahead of the much awaited Jackson Hole Symposium, which would influence Fed rate hike expectations and eventually help determine the pair's next leg of directional move. 

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Technical levels to watch

Immediate support is pegged near 109.15 level, below which the pair is likely to break below the 109.00 handle and head towards testing multi-month lows support near the 108.60 region.

On the upside, 109.50-55 zone now becomes immediate resistance, which if cleared could assist the pair to make a fresh attempt towards reclaiming the 110.00 handle.