USD/JPY relentless fall unchecked, breaks below 107.00 after ISM

Bears took a firm control over the USD/JPY pair, dragging the pair further deep into negative territory to a multi-week low level of 107.00.

The USD/JPY pair traded as low as 107.05, its lowest level since May 9, after official report showed job growth decelerating sharply to show an addition of meager 38,000 jobs in May. The number was far below consensus forecast of 160,00 new jobs.

Adding to the disappointing headline NFP print, the ISM non-manufacturing PMI fell to 52.9 in May from to April's 55.7 and also fell short of 55.4 expected. 

The Japanese currency also seems to benefit from the prevailing risk-off sentiment, as depicted by a sharp fall across European and US equity markets. 

Technical outlook

 Valeria Bednarik, Chief Analyst at FXStreet notes, "The ongoing decline in stocks, also down after the announcement, will probably keep the pair under pressure during the upcoming hours, with scope now to retest the 105.50 region during the upcoming week, and even lower. The 1 hour chart shows that the 100 SMA is now crossing below the 200 SMA far above the current level, around 110.00, while the technical indicators head lower vertically, entering oversold territory and distorted, given the sharp decline, but anyway supporting a downward continuation. In the 4 hours chart, the technical indicators have also turned south within oversold territory, whilst the price is far below its moving averages, less distorted and with room for further declines."

"Support levels: 107.50 107.10 106.80
Resistance levels: 108.05 108.40 108.90"