USD/JPY attempting a recovery, still trading below 109.50

Extending its slide below 110.00 handle, the USD/JPY pair is now trading below 109.50 level amid risk-off sentiment prevailing across global equity markets.

The pair on Monday reversed a good part of its gains recorded in the previous week as investors safe-haven appeal boosted demand for the Japanese currency. The USD/JPY pair declined on Monday despite of the Japanese trade balance data that although posted larger than expected trade surplus but was led by a sharp decline in imports suggesting declining trade activity.

Moreover, the pair is reversing after failing to sustain its strength above 110.00 psychological mark and 50-day SMA. Hence, a follow through selling below 109.00 round figure mark might continue to drag the pair lower.

Technical levels to watch

From current levels, the pair might take immediate support near 109.00 round figure mark, below which the pair is likely to extend its downward trajectory initially towards 108.60 intermediate support and eventually towards 20-day SMA strong support near 108.40-35 region.

On the flip side, 50-day SMA near 109.90 region now become immediate strong resistance to be conquered. Only a sustained strength back above 50-day SMA would open room for further appreciating move, initially towards recent highs resistance near 110.55-60 resistance and eventually beyond 111.00 round figure mark to 111.15-20 strong resistance.