“¢ Resurgent USD demand helped the pair to stage a goodish rebound from 3-week lows.
“¢ Improving risk-sentiment weighs on JPY’s safe-haven status and remained supportive.
“¢ Market participants now look forward to the US durable goods orders for fresh impetus.
The USD/JPY pair built on previous session’s recovery move from three-week lows and continued gaining positive traction for the second straight session on Wednesday.
Resurgent US Dollar demand turned out to be one of the key factors behind the pair’s overnight rebound, with a slight risk-recovery now denting the Japanese Yen’s safe-haven status and providing an additional boost on Wednesday.
Bullish traders largely shrugged off a softer tone around the greenback and rather took cues from a goodish pickup in the US Treasury bond yields, which further pointed to improving investors’ appetite for riskier asset – like equities.
The pair climbed to fresh weekly tops, albeit seemed struggling to make it through the 113.00 handle as traders still seemed reluctant to place aggressive bullish bets amid concerns over slowing global growth and prospects of a further escalation in the US-China trade war.
Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have already bottomed out in the near-term. Market participants now look forward to the US economic docket, highlighting the release of durable goods orders, for some meaningful impetus later during the early North-American session.
Technical outlook
Omkar Godbole, FXStreet’s own Analyst and Editor explains, “the bears have persistently failed to breach the long-term SMA support on the daily closing basis. Therefore, a bullish-to-bearish trend change would be confirmed if the spot closes below the 100-day SMA. The breakdown, if confirmed, would open the doors for a deeper sell-off to levels below 110.00.”
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