“¢ Improving risk-appetite weighs on JPY and provides a minor lift.
“¢ Goodish pickup in the US bond yields remained supportive.
“¢ Uptick remains capped amid a modest USD profit-taking.
The USD/JPY pair caught some fresh bids on Tuesday and built on overnight rebound from the vicinity of the key 110.00 psychological mark, or 1-1/2 month lows.
Turkey-led market turmoil and the risk-off mood seemed to have eased a bit on Tuesday, which was eventually seen weighing on the Japanese Yen’s safe-haven appeal. This coupled with a follow-through uptick in the US Treasury bond yields remained supportive of a mildly positive tone surrounding the major.
The uptick, however, lacked any conviction and remained capped at the 111.00 handle amid a modest US Dollar profit-taking slide, which once again failed to assist the pair to move back above 50-day SMA support turned resistance.
Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have bottomed out in the near-term, especially after last week’s bearish break below a short-term ascending trend-line support extending from May monthly lows.
There isn’t any major market-moving economic data due for release on Tuesday and hence, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair’s momentum ahead of Wednesday’s US monthly retail sales data.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes, “the bears remain in the hunt for 109.91 (38.2 per cent Fibonacci retracement support). A close below that level would only bolster the bearish setup and open the doors to 108.90 (50 per cent Fibonacci retracement).”
“On the other hand, a move above the descending trendline would abort the bearish view and a daily close above 112.15 (Aug. 1 high) will likely put the pair on the path to 113.18 (recent highs),” he adds further.
Share
