USD/JPY plunges below 50-DMA to six week lows

The greenback continues to lose altitude, with the USD/JPY pair breaking below 50-day SMA support to test the lowest level since Dec. 8.

Currently trading below mid-113.00s, the pair extended its bearish trend for the seventh straight trading session amid a fresh bout of global risk-aversion on growing prospects of a 'hard Brexit'. Hence, investors on Tuesday will remain focused on a key speech by the UK Prime Minister Theresa May, where she is expected to unveil plans to end Britain's association with the European Union.

Meanwhile, growing uncertainty over the incoming Trump administration's fiscal policies continues to force investor to unwind their bullish US Dollar bets and is also seen collaborating to the pair's ongoing slide to six week lows.

Later during NA session, the release of Empire state manufacturing index and Fedspeaks would now be looked upon for some immediate respite for the bulls.

Technical levels to watch

A follow through selling pressure below 113.13 level (Dec. 8 low), leading to a subsequent break below 113.00 round figure mark, would turn the pair vulnerable to head towards its next support near 112.00 handle with 112.85-80 region acting as intermediate support.

On the flip side, 50-day SMA support break-point near 113.70 region now becomes immediate resistance above which the pair is likely to recover back to 114.00 handle before attempting a move back towards session peak resistance near 114.30 area.