- Scepticism over future US-China trade relations benefitted the JPY’s safe-haven status.
- Bearish traders further took cues from a sharp pullback in the US Treasury bond yields.
- A goodish pickup in the USD demand seemed to be the only factor lending some support.
The USD/JPY pair extended its sideways consolidative price action and oscillated in a narrow trading band, just above mid-109.00s through the Asian session on Tuesday.
The pair failed to capitalize on the previous session’s goodish positive move and remained capped below the 109.70-75 region – multi-month tops set earlier this December and retested last Friday.
Despite agreeing on the phase-one trade deal, some scepticism over the future relations between the US and China kept a lid on the recent optimism and benefitted the Japanese yen’s safe-haven status.
The prevalent cautious mood triggered a modest pullback in the US Treasury bond yields, which further collaborated towards capping any strong follow-through positive move for the major.
Meanwhile, a goodish pickup in the US dollar demand seemed to be the only factor lending some support to the major and might help limit any meaningful corrective slide, at least for the time being.
Hence, it will be prudent to wait for a sustained move in either direction before positioning for some intraday trading opportunities amid absent relevant market-moving US economic releases on Tuesday.
Technical levels to watch
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