USD/JPY: Downside again capped near 109.60 despite risk-off in equities

• USD/JPY is under pressure, possibly due to risk aversion in equities.  
• The 10-pip support range of 109.5-109.55 continues to hold ground. A decisive break of the 110.00-109.55 trading range is awaited.  

The USD/JPY bears are again struggling to push the pair below 109.60 despite risk aversion in the equities.  

As of writing, the pair is trading at 109.74, having clocked a session low of 109.64 a few minutes before press time. The S&P 500 futures are currently down 0.40 percent and the MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.3 percent on renewed trade concerns.  

The risk sentiment took a hit in the US trading hours after President Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. Add to that the growing fears of a recession in Europe and the path of least resistance in both the equities and USD/JPY appear to be on the downside.  

Even so, the JPY bulls are struggling to push USD/JPY below 109.65-109.55 – that 10 pip range has served as strong support since Wednesday. Essentially, the pair is trapped between 110.00-109.55.  

A convincing move above 110.00 would signal a continuation of the rally from January lows below 105.00. The bullish case, however, would weaken if the pair finds acceptance below 109.55.  

USD/JPY Technical Levels