“¢ Bulls fail to capitalize on the early uptick, despite a pickup in USD demand.
“¢ A sharp fall in the US bond yields/cautious mood seemed to cap gains.
“¢ US-China trade optimism fades after comments by US Commerce Secretary.
The USD/JPY quickly retreated over 30-pips in the last hour and is currently placed at the lower end of its daily trading range, around mid-109.00s.
The pair failed to capitalize on its early uptick to an intraday high level of 109.80, with bulls shrugging off a goodish pickup in the US Dollar demand and impressive initial weekly jobless claims data from the US.
The prevalent cautious mood around equity markets was seen lending some support to the Japanese Yen’s safe-haven status, which coupled with a sharp fall in the US Treasury bond yields prompted some selling at higher levels.
Meanwhile, the latest leg of a sudden fall over the past hour or so came after the US Secretary of Commerce, Wilbur Ross, poured cold water on growing optimism over a possible resolution to the US-China trade disputes.
In an interview with CNBC, Ross said that we are miles and miles away from resolving China trade issues and it was too early to judge where the US-China trade talks were headed as structural reforms are the hard thing with China.
The downfall, however, so far has been limited, with the pair holding within this week’s/previous session’s broader trading range and waiting for the next big catalyst before determining the next leg of a directional move.
Technical levels to watch
Immediate support is pegged near the 109.30 level, below which the pair is likely to accelerate the fall towards the 109.00 handle en-route its next major support near the 108.75-70 region. On the flip side, the 109.80-85 region, closely followed by the key 110.00 psychological mark might continue to act as an immediate strong hurdle, which if cleared could lift the pair further towards the 110.25-30 supply zone.
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