• Regains positive traction despite the prevalent USD selling bias.
• Bulls seemed to track a goodish pickup in the US bond yields/
• A modest recovery in European equity markets weighs on JPY.
The USD/JPY pair reversed an early European session dip to an intraday low level of 111.85 and is now headed towards the top end of its daily trading range.
The pair managed to catch some fresh bids and seemed rather unaffected by the prevalent weaker tone surrounding the US Dollar, with bulls taking cues from a sudden pickup in the US Treasury bond yields.
Adding to this, a modest rebound across European equity markets dented the Japanese Yen’s safe-haven status and further collaborated to the pair’s intraday steady climb of around 20-25 pips.
Meanwhile, the US President Donald Trump’s comments, via Twitter, hinted towards a possible announcement of the new US tariff later during the day, albeit did little to influence the price action.
Despite a goodish uptick, the pair remains below the 112.15 immediate strong hurdle and hence, it would be prudent to wait for a strong follow-through buying before positioning for any further near-term up-move.
Next of relevance will be the release of Empire State Manufacturing Index, which is unlikely to be a major game changer but will still be looked upon for some short-term trading opportunities.
Technical levels to watch
Momentum beyond the mentioned hurdle is likely to get extended towards 112.50-55 intermediate resistance before the pair eventually darts towards reclaiming the 113.00 handle.
On the flip side, the 111.85-80 region now becomes an immediate support to defend, which if broken might turn the pair vulnerable to head back towards 111.25 support en-route the 111.00 handle.