“¢ A solid rebound in the US bond yields helped ease the recent USD bearish pressure.
“¢ Improving risk sentiment undermines JPY’s safe-haven status and remained supportive.
“¢ Investors seemed inclined to cover short positions ahead of Powell’s scheduled speech.
The USD/JPY pair quickly reversed a mid-European session dip to sub-108.00s level and was now seen building on its intraday bounce from 4-1/2 month lows.
Despite firming expectations that the Fed might cut interest rates by the end of this year, the US Treasury bond yields made a solid comeback on Tuesday and helped ease the recent US Dollar bearish pressure.
The greenback recovered early lost ground to three-week lows, which coupled with improving risk sentiment further undermined the Japanese Yen’s safe-haven demand and collaborated to the pair’s intraday recovery.
The uptick could further be attributed to some short-covering move from near-term oversold conditions and after the recent slump of over 200-pips from the vicinity of the key 110.00 psychological mark set last Thursday.
Hence, it would be prudent to wait for a strong follow-through before confirming that the pair might have actually bottomed out or traders start positioning for any further near-term recovery move.
Moving ahead, Tuesday’s key focus will be on the Fed Chair Jerome Powell’s scheduled speech, which might produce some meaningful trading opportunities during the early North-American session.
Technical levels to watch
Share
