USD/JPY breaks below 100.00 psychological mark

Extending its sharp sell-off, the USD/JPY pair fell below 100.00 psychological mark for the first time since early July as markets now await for the release of US CPI for any immediate respite.

Broad based US Dollar sell-off is turning out to be the key theme in the FX market on Tuesday. Adding to this, weakness in equity markets has been driving investors to the traditional safe-haven currency, the Japanese Yen, and aggravating the selling pressure.

Moreover, stop-loss orders amid thin market liquidity conditions could have also contributed to the pair's ongoing sharp slide. 

Focus now shifts to US economic releases, namely - CPI, housing starts and industrial production data for some recovery. However, key determinant for the pair's near-term trajectory would remain on Wednesday's FOMC meeting minutes.

Technical levels to watch

Sustained weakness below 100.00 mark is likely to keep the vulnerable to head back towards testing Brexit swing lows support near 99.00 round figure mark. On the flip side, any recovery attempts might now confront strong resistance near 100.80 region, above which a fresh bout of short-covering could lift the pair back towards 101.95-102.00 strong resistance.