USD/JPY keeps looking for support, challenges 136.00

• Japanese Yen among top performers as the US Dollar remains under pressure.
• Greenback resumes slide after United States’ economic reports.
• USD/JPY down more than 200 pips, but no signs of stabilization seen so far.

The USD/JPY printed a fresh three-month during Thursday’s American session, following the release of US economic data at 135.73. It then bounced modestly toward the 136.00 zone. It remains under pressure, with the US Dollar down across the board.

Easing inflation in the US hits the Dollar

On Wednesday, Federal Reserve Chairman Jerome Powell pointed toward a slowdown in rate hikes, as soon as December. His comments were no surprise but triggered a rally in stocks and in Treasuries. The US Dollar began a decline that is still going on.

Inflation data released on Thursday showed a slowdown, although still at elevated levels with the Core PCE at 5% (annual) in October down from the 5.2% of September. Personal income and Spiting rose 0.7% and 0.8% respectably. Continuing Jobless Claims rose for the seventh week in a row to the highest level since March.

The numbers did not help the Dollar and US yields held near monthly lows, supporting the Japanese Yen. Not even higher equity prices in Wall Street are offsetting the strength of the yen.

Oversold?

The USD/JPY is on its way to the lowest daily close since mid-August, falling for the fourth consecutive day. The pair is challenging the 136.00 area and below the next support emerges at 135.50. Below a horizontal line is seen around 134.60 and then appears the 200-day Simple Moving Average at 134.40.

No signs of consolidation are seen at the moment. Despite oversold reading in many technical indicators, the Momentum remains extremely negative. A rebound back above 137.00 could alleviate the bearish pressure. Above 137.70 the outlook for the Dollar could improve (or become less negative).

Technical levels