“¢ The USD bulls remain on the defensive amid the ongoing US political drama.
“¢ Cautious equity markets underpin JPY’s safe-haven appeal and cap gains.
“¢ Focus remains on the release of the latest FOMC meeting minutes.
The USD/JPY pair once again met with some fresh supply near mid-110.00s and might now be headed back towards the lower end of its daily trading range.
A modest US Dollar attempted recovery move on Wednesday quickly ran out of steam amid the ongoing US political drama. In the latest development, the lawyer of Michael Cohen said that Cohen has knowledge of a Russian conspiracy and there is no dispute that Trump committed a crime.
This against the backdrop of the US President Donald Trump‘s critical comments on the Fed’s policy tightening and sliding US Treasury bond yields kept the USD bulls on the defensive and failed to assist the pair to build on its early rebound.
Moreover, the prevalent cautious mood around equity markets extended some support to the Japanese Yen’s safe-haven appeal and further collaborated towards keeping a lid on any meaningful up-move for the major.
It would now be interesting to see if the pair continues finding some buying interest near the 100-day SMA support as the market focus now shifts to today’s key event risk – the release of FOMC monetary policy meeting minutes.
Technical levels to watch
A sustained break below the key 110.00 psychological mark (100-day SMA), leading to a subsequent fall below the very important 200-day SMA would turn the pair vulnerable to extend the near-term slide towards testing its next support near the 109.40-35 region.
On the upside, the 110.50-55 area might continue to act as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 111.00 handle before eventually darting towards challenging the 111.15-20 supply zone.
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