“¢ Reviving safe-haven demand continues exerting pressure for the second straight session.
“¢ A follow-through USD retracement further collaborated to the prevalent selling bias.
The USD/JPY pair remained under some selling pressure for the second consecutive session and is currently placed within striking distance of weekly lows, touched earlier today.
The pair extended previous session’s retracement slide from six-week tops and continues to be weighed down by global flight to safety. Overnight sharp slide in the US equities spilt-over to the Asian markets and was eventually seen benefitting the Japanese Yen’s safe-haven appeal.
Adding to this, a follow-through US Dollar retracement slide, amid persistent trade-war concerns, exerted some additional downward pressure and further collaborated to the pair’s offered tone.
The selling bias now seems to have abated a bit, at least for the time being, as traders now seemed reluctant to place aggressive bets and remain on the sidelines in wake of the Fourth July holiday in the US.
Moving ahead, this week’s important releases from the US, including the latest FOMC meeting minutes and the keenly watched monthly jobs report (NFP), will play an important role in determining the pair’s next leg of directional move.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes, “the USD/JPY convincingly crossed the falling trendline (drawn from May 21 high and June 16 low) on Monday and hence, was expected to re-test May 21 high of 11.40 this week.”
“Instead, it ran into offers at a high of 111.13 on Tuesday and ended up creating a bearish outside-day candle (bearish reversal pattern). Further, a short-lived break above the falling trendline (drawn from May 21 high and June 16 low) (or fake breakout) has weakened the bull case,” he adds further.
Share
