- The global flight to safety continues to benefit the Japanese Yen.
- The ongoing slump in the US bond yields undermined the USD.
- Technical selling below 106.00 further accelerates the downfall.
The greenback selling pressure picked up the pace in the last hour and dragged the USD/JPY pair farther below the 106.00 handle, back closer to multi-month lows set in the previous session.
Investors are growing increasingly pessimistic about the outlook for the world economy in the wake of the recent escalation in the US-China trade tensions, which continued boosting demand for traditional safe-haven currencies – like the Japanese Yen.
A series of dovish central-bank surprises on Wednesday underscored the market concerns and were evident from the ongoing slump in the US Treasury bond yields, which weighed heavily on the US Dollar and further collaborated to the pair’s sharp intraday slide.
This coupled with possibilities of some short-term trading stops being triggered on a sustained break below the 106.00 handle further aggravated the bearish pressure, with bears now eyeing a follow-through slide below the overnight swing lows – around mid-105.00s.
Meanwhile, technical indicators on short-term charts remain on the verge of breaking into the oversold territory, which might eventually turn out to be the only factor that might help limit further downside amid absent relevant market moving economic releases from the US.
Technical levels to watch
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