USD/JPY: risks of further extensions to the downside

Currently, USD/JPY is trading at 109.30, down -0.26% on the day, having posted a daily high at 109.70 and low at 109.28.

USD/JPY is seeing some early downside today on the back of the Trump news. Yen crosses are picking up safe haven demand in thin trade after a turbulent day overnight wit US data and the FOMC. In respect to the Trump news, the special counsel is investigating Trump for possible obstruction of justice. The obstruction of justice investigation into the president was initiated following Comey's departure as FBI Direction on May 9, the Washington Post notes.

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USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair is still in the bearish path, ending the day well below its 100 and 200 SMAs in the 4 hours chart, whilst settling further away from the 61.8% retracement of the latest bullish run at 110.50. "Technical indicators in the mentioned time frame have bounced from oversold readings, but remain within a negative territory, maintaining the risk towards the downside."