“¢ Some signs of stability in equity markets weigh on JPY’s safe-haven demand.
“¢ Resurgent US bond yields offset a modest USD downtick and remain supportive.
The USD/JPY pair built on its steady climb from 1-1/2 month lows and spiked back to the 111.00 neighborhood during the early North-American session.
With markets still dealing with the ongoing currency crisis in Turkey, some initial signs of stability across global financial markets weighed on the Japanese Yen’s safe-haven demand and triggered the initial leg of the recovery move.
Improving investors appetite for riskier assets was further evident from a positive opening across US equity markets, which provided an additional boost and further collaborated to the pair’s rebound of over 80-pips from an intraday low level of 110.11.
Meanwhile, a goodish pickup in the US Treasury bond yields, tough failed to revive the US Dollar demand, provided an additional boost and remained supportive of the recovery move.
The uptick now seems to have paused at 50-day SMA – support turned resistance, which if cleared might prompt some additional short-covering move and help the pair to gain some positive traction amid empty US economic docket.
Technical levels to watch
Any subsequent up-move beyond the 111.00 handle is likely to confront resistance near the 111.20-25 horizontal zone, above which the pair seems to aim back towards reclaiming the 112.00 round figure mark.
On the flip side, mid-110.00s now seems to protect the immediate downside, which if broken might force the pair to head back towards challenging the key 110.00 psychological mark.
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