USD/JPY extends the corrective slide below 112.50 amid risk-aversion

• Bears in control as risk-off remains at full steam amid global political worries.
• Safe-haven Yen underpinned, buy the dips in USD/JPY?

The Yen buyers are back in the market, as the risk-off theme extends into the European trading, with the USD/JPY pair now looking to test the 112 handle following a break below the key 112.54 support.

The Asian markets sold-off risk this Tuesday, in the wake of rising concerns over Saudi Arabia’s diplomatic isolation as well as over Italy’s budget and Brexit anxiety. The Japanese benchmark, the Nikkei 225 index closed -2.70% lower while the Chinese equities nearly 3% down. The US stock futures are also down -1% to -1.50%.

Also, the buyers fail to find any support amid stalled US dollar rally versus its main competitors and a lack of fresh fundamental drivers, as the focus now shifts towards the Fedspeaks due later today in the NA session.

USD/JPY Technical levels

FXStreet´s Analyst, Omkar Godbole offers key technical levels for trading USD/JPY in the session ahead.

Resistance

R1: 112.89 (previous day's high)

R2: 113.09 (50% Fib R of 114.55/111.62)

R3: 113.18 (July high)

Support

S1: 112.54 (5-day EMA)

S2: 112.34 (10-day EMA)

S3: 112.03 (50-day EMA)