USD/JPY Bears move in and take out key structure

• USD/JPY bears eye a deeper correction below critical support. 
• The US dollar remains under pressure while below 110.50, DXY.

USD/JPY is under pressure with the price trading 0.15% lower and extending on the overnight move in the US dollar to a low of 143.52 so far. The US yields made fresh lows as the 10-year yield fell 1.4 basis points to 3.6% while the two-year rate slipped by less than one basis point to 4.1%. while the US dollar was sold off on yet further data disappointments. 

The DXY, which measures the greenback vs. a basket of currencies fell from a high of 111.886 for the day, or 110.870 on the JOLTS data that showed US job openings fell to almost 10.1 million in August, according to the Bureau of Labor Statistics.

This was below the consensus on Econoday for 11.15 million and down from 11.17 million reported in July.

The larger-than-expected decline could be the first sign that demand for labour is falling ahead of this week’s main event in the US Nonfarm Payrolls data. 

The weaker data has caused traders to bet the Federal Reserve may raise interest rates less than previously expected as the central bank turns more dovish as the US economy slows.

In other data for the day, new orders for factory goods were flat in August, below expectations for a 0.2% increase in a survey compiled by Bloomberg and following a 1% decrease in July. 

Redbook reported that US same-store retail sales were up 12.3% year-over-year in the week ended Oct. 1, larger than an 11% gain in the prior week due to an increase in fall apparel sales at the end of the week as temperatures turned cooler.

all combined, along with the prior days’ poor manufacturing data, consequently, US stocks advanced on signs that the supply-demand gap in the labour market was narrowing. This is a dovish factor that is supportive of risk appetite on Wall Street and weighing on USD/JPY. The Dow Jones Industrial Average leapt 2.8% to 30,316.32, the S&P 500 surged 3.1% to 3,790.93 and the Nasdaq Composite was 3.3% higher at 11,176.41. 

USD/JPY M15 chart

As for the technical, the price is breaking below the key structure and could be on the verge of a deeper move to correct the prior rally. The DXY is trying to base at support: