USD/JPY struggles to extend losses below 113

The USD/JPY pair slipped below the 113 handle during the American session but had a difficult time gathering bearish strength amid a lack of fresh fundamental catalysts. As of writing, the pair was trading at 113.03, losing 0.66%, or 75 pips, on the day.

The pair's price action continues to be driven by the greenback's weakness on Tuesday. The US Dollar Index fell below the 98 mark for the first time in more than six months on Tuesday as the selling pressure stayed persistent after another batch of weak macroeconomic data from the United States. However, the index's recent fall seems to have lost steam as it moves in a very tight range around 98 in the last hour.

• US Dollar slips below 98, touches lowest level since early November

Moreover, the risk appetite faded away in the session after the major equity indexes in the U.S. fell back into the red following a strong opening, allowing the investors to stay closer to safer assets such as the JPY. After touching a fresh record high, the S&P 500 Index is now losing 0.05% while the Dow Jones Industrial Average is dropping 7.4 points, or 0.04%, to 20,974.55 points. The economic calendar features Machine Orders from Japan in the early Asian session but this data is unlikely to have any impact on the price action.

Technical outlook

With a decisive break below 113 (psychological level), the pair could aim for 112.35 (100-DMA) and 112 (psychological level). To the upside, resistances could be seen at 113.75 (daily high), 114.00 (psychological level) and 114.60 (Mar. 2 high).

• USD/JPY short-term technicals: neutral-bearish - Nomura