“¢ US-China trade tensions continue to underpin JPY’s safe-haven status and prompt fresh selling.
“¢ Renewed weakness in the US bond yields/subdued USD demand does little to lend any support.
The USD/JPY pair extended its intraday pullback from weekly tops and dropped to fresh session lows, closer to mid-109.00s in the last hour.
The pair failed to capitalize on this week’s attempted recovery move from three-month lows and faced rejection near the key 110.00 psychological mark on reports that China is no longer interested in trade talks with the US.
The news further fueled concerns over a full-blown trade war between the world’s two largest economies, which provided a goodish lift to the Japanese Yen’s safe-haven status and prompted some fresh selling around the major.
Bearish traders further took cues from some renewed weakness in the US Treasury bond yields, with a subdued US Dollar price action doing little to lend any support or stall the ongoing slide to a fresh intraday low level of 109.55.
It would now be interesting to see if the pair is able to find any support at lower levels or the current pullback marks the end of the recent corrective bounce amid fresh concerns over slowing global economic growth.
Market participants now look forward to a relatively thin US economic docket – featuring the only release of the Prelim UoM Consumer Sentiment Index for May, in order to grab some short-term trading opportunities.
Technical levels to watch
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