USD/JPY falls back closer to 4-month lows, eyeing 110.00 mark ahead of US data

   “¢   The JPY continues to benefit from safe-haven demand despite rallying equities.
   “¢   The USD remains heavily offered across the board and adds to the bearish pressure.
   “¢   Traders now eye second-tier US economic data for some short-term impetus.

The selling pressure around the USD/JPY pair remained unabated through the mid-European session, with bears now eyeing a retest of over four-month lows set earlier this week.  

Despite a strong rally in equity markets, the Japanese Yen continues to benefit from safe-haven demand amid growing market concerns over global economic growth and renewed US-China trade tensions.

Reports that the US President Donald Trump is considering banning US companies from using equipment made by China’s Huawei and ZTE raised scepticism over a possible resolution in the tariff dispute between the world’s two largest economies.

Meanwhile, traders largely shrugged off a modest pickup in the US Treasury bond yields, with persistent US Dollar selling, weighed down by the partial US government shutdown, doing little to ease the prevalent bearish pressure surrounding the major.

Currently hovering around the 110.30-25 region, market participants now look forward to the US economic docket, featuring the release of Chicago PMI and pending home sales data for some immediate respite for the USD bulls and some meaningful trading impetus.

Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “The US calendar will be quite busy in this last trading day of the week, with multiple releases although no first-tier data. Anyway, non-impressive figures will likely weigh the greenback further lower, despite movements could be limited by reduced volumes.”

Technical outlook

“In the 4 hours chart, the 100 and 200 SMA gain downward strength far above the current level, while technical indicators maintain downward slopes, the Momentum within neutral levels but the RSI currently at 37, anticipating additional declines ahead,” she added further.