“¢ A modest pickup in the USD demand helps reverses early dip to weekly lows.
“¢ Recovery in European equities further weighs on JPY’s safe-haven appeal.
The USD/JPY pair extended its steady climb from an intraday low level of 110.28 and might now be headed back towards the top end of its daily trading range.
A modest pickup in the greenback demand, with the key US Dollar Index reversing early dip to over one-week lows, was seen as one of the key factors supporting the pair’s rebound of around 20-25 pips from session lows.
This coupled with a goodish recovery in the European equity markets weighed on the Japanese Yen’s perceived safe-haven appeal and further contributed to the ongoing uptick back to mid-110.00s.
Despite today’s good two-way moves, the pair lacked any strong conviction as investors now seemed to hold from placing any aggressive bets ahead of this week’s important releases from the US.
The latest FOMC meeting minutes and the keenly watched US monthly jobs report, popularly known as NFP, will now be looked upon for clues over the Fed’s near-term monetary outlook and eventually determining the pair’s next leg of directional move.
Technical levels to watch
Any subsequent up-move might confront fresh supply near the 110.85 region, above which the pair is likely to jump back above the 111.00 handle and aim towards testing May swing high resistance near the 111.40 region.
On the flip side, the 110.30-25 region might continue to protect the immediate downside and is followed by the key 110.00 psychological mark, which if broken might prompt additional weakness towards 109.80-75 zone (55-day SMA).
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