USD/JPY breaks below 110.00 handle for the first time since August 21

   •  The US-China trade optimism-led early uptick turns out to be rather short-lived. 
   •  The prevalent USD bearish sentiment prompted some fresh selling at higher levels.

The USD/JPY pair kept losing ground through the mid-European trading session and finally broke below the key 110.00 psychological mark for the first time since August 21.

The pair failed to capitalize on an early attempted rebound to mid-110.00s, supported by the US President Donald Trump’s positive signals to ease US-China trade tensions, and drifted into negative territory for the third consecutive session.

The prevalent US Dollar selling bias, amid expectations of a dovish Fed next year and a partial US government, was seen as one of the key factors behind the pair’s follow-through downfall after last week’s bearish breakthrough the very important 200-day SMA.

Meanwhile, possibilities of some technical selling below last week’s swing lows, around the 110.15 region, coupled with relatively thin market liquidity conditions further collaborated towards aggravating the selling pressure since the early European session.

It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current downfall marks a fresh bearish breakdown amid absent relevant market moving economic releases on the Near Year’s Eve.

Technical levels to watch