USD/JPY breaks below 200-DMA, hits fresh one-month lows

   •  USD sold-off after comments by Chinese officials.
   •  Technical selling adds to the bearish momentum. 

The USD/JPY pair remained under some intense selling pressure through the mid-European session and tumbled to fresh one month lows in the last minute.

The US Dollar sold-off across the board following comments by Chinese officials that they would consider either slowing down or halting purchases of US Treasuries. 

Against the backdrop of speculations that the BOJ could start to withdraw its massive monetary stimulus, a fresh wave of USD weakness attracted some fresh selling pressure around the major.

The pair extended its downfall further below the 112.00 handle and took along some big stops placed at the very important 200-day SMA, which seems to have further aggravated the selling pressure.

Currently struggling near the 111.30-40 region, today's second-tier US economic releases - import price index and the final wholesale inventories data, seems unlikely to provide any immediate respite for the USD bulls. 

Hence, a follow-through weakness, led by some technically selling below a technically significant level, now looks a distinct possibility.

Technical levels to watch

Immediate support is now seen near the 111.25-20 region, below which the pair is likely to slide below the 111.00 handle and head towards testing Nov. swing lows support near the 110.85 level.

On the upside, any recovery attempts might now confront fresh supply near the 111.70 region (200-DMA), which if cleared might trigger a short-covering bounce back towards the 112.00 handle.