“¢ The USD continues to find support from the recent uptick in the US bond yields.
“¢ Fading safe-haven demand undermines JPY and remained supportive of the up-move.
“¢ Traders now eye US ISM PMI in order to grab some short-term opportunities.
The USD/JPY pair caught some fresh bids on Tuesday, albeit bulls still await a sustained break through the 112.00 round figure mark.
The pair continued with its struggle to make it through the mentioned handle and witnessed a late pull-back on Monday on the back of a sharp slide in the US equity markets, which was seen boosting the Japanese Yen’s safe-haven status.
However, the prevalent bullish sentiment surrounding the US Dollar, underpinned by the recent upsurge in the US Treasury bond yields, helped limit deeper losses, rather assisted the pair to regain positive traction during the Asian session on Tuesday.
The uptick was further supported by some signs of stability in the global financial markets, though China’s lower GDP target of 6.0%-6.5% for 2019 continued fueling global growth concerns and might keep a lid on any runaway rally, at least for the time being.
Moving ahead, today’s US economic docket, highlighting the release of ISM non-manufacturing PMI, will now be looked upon for some impetus and short-term trading opportunities later during the early North-American session.
Technical levels to watch
On a sustained break through the 112.00 handle, the pair is likely to accelerate the up-move further towards testing its next major hurdle near the 112.50-55 region. On the flip side, the 111.65-60 region now seems to protect the immediate downside and is followed by the very important 200-day SMA, around the 111.35 area, which if broken might turn the pair vulnerable to slip below the 111.00 round figure mark.