“¢ The prevalent USD selling bias exerts some fresh downward pressure.
“¢ Bullish traders seemed rather unimpressed by surging US bond yields.
The USD/JPY pair retreated around 25-pips from the 113.00 neighbourhood, or fresh two-month tops, and has now drifted into negative territory.
A fresh wave of US Dollar selling pressure failed to assist the pair to build on its early positive momentum. The USD bulls seemed unimpressed by the ongoing upsurge in the US Treasury bond yields, which turned out to be one of the key factors prompting some long-unwinding pressure since the early European session.
Meanwhile, signs of stability in equity markets, which tends to weigh on the Japanese Yen’s safe-haven status also did little to provide any bullish impetus, with the USD price dynamics turning out to be an exclusive driver of the pair’s momentum on Tuesday.
The downside, however, is more likely to be limited amid growing market conviction over an eventual Fed rate-hike move on Wednesday. Hence, the key focus will be on the post-meeting press conference, which will eventually help investors to determine the pair’s next leg of directional move.
In the meantime, today’s release of the Conference Board’s consumer confidence index for the month of September will be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Any subsequent fall is likely to find support near mid-112.00s, below which the downfall could further get extended towards the 112.00 handle with some intermediate support near the 112.25-20 region. On the flip side, the 113.00 handle might continue to act as an immediate hurdle, which if cleared should lift the pair further towards July swing high resistance near the 113.15-20 region.
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