- Reviving safe-haven demand benefitted the JPY and prompted some intraday selling.
- Bulls might now try and defend the overnight ascending trend-line resistance breakpoint.
The USD/JPY pair failed to capitalize on its early uptick to fresh multi-week tops and started retreating from 100-day SMA resistance. Currently placed near the lower end of its daily trading range, reviving safe-haven demand for the Japanese Yen seemed to be the only factor exerting downward pressure on the major.
The intraday pullback of around 30-pips has now dragged the pair back closer to short-term ascending trend-line resistance breakpoint, cleared decisively in the previous session. The mentioned trend-line extends from highs touched on August 26, September 5/9 and should now act as a key pivotal point for intraday traders.
Meanwhile, technical indicators on the 4-hourly chart have already eased from the overbought territory and maintained their bullish bias on the daily chart, supporting the prospect for emergence of dip-buying interest. However, oscillators on the 1-hourly chart have been losing positive momentum and warrant some caution for bullish traders.
Failure to defend the mentioned resistance-turned-support – near the 107.70 region – will confirm a rejection near 100-day SMA and set the stage for the resumption of the recent downward trajectory. The pair then could head back towards testing the 107.00 handle before eventually falling to the 106.70 horizontal support.
On the flip side, sustained move beyond the 100-DMA resistance, currently near the 108.15 region, will negate any near-term bearish bias and trigger a fresh bout of the short-covering move, lifting the pair further towards reclaiming the 109.00 round figure mark amid encouraging US-China trade-related developments.
USD/JPY daily chart