“¢ Fails to capitalize on early up-move led by fading safe-haven demand.
“¢ Weaker US bond yields did little to assist the USD to preserve early gains.
“¢ Traders now eye US ISM non-manufacturing PMI for some fresh impetus.
The USD/JPY pair extended its steady retracement slide from the key 110.00 psychological mark and refreshed session low in the last hour, albeit quickly recovered few pips thereafter.
The pair built on last week’s solid rebound from the 108.00 neighborhood and jumped to 1-1/2 week tops on Tuesday amid fading safe-haven demand, which was seen weighing on the already weaker development.
Geopolitical tensions eased further after the White House Press Secretary announced a set time for the much-awaited meeting likely to take place between the US President Trump and North Korea leader Kim Jong-Un on June 12th in Singapore.
The up-move, however, lacked any strong follow-through and was being capped by a mildly softer tone around the US Treasury bond yields, which failed to assist the US Dollar to build on/sustain early up-move beyond the 94.00 handle.
Looking at the technical picture, the pair has managed to hold its neck above a horizontal resistance break-point, now turned support near the 109.70 level. Hence, the current pull-back might still be categorized as corrective in nature, with a follow-through up-move, possibly back closer to the very important 200-day SMA, now looking a distinct possibility.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “A monthly close above 110.77 (long-term falling trendline) would signal a long-term bearish-to-bullish trend change and a continuation of the rally from the recent low of 104.63.”
“On the downside, a break below the monthly low of 108.72 would put more focus on the repeated failure to take out key trendline hurdles, as represented by the previous two monthly candles, and could yield a sharp drop to 104.63 (March low),” he added further.
Share
