- USD/JPY rebounds from daily lows near 105.20 on Tuesday.
- The bounce in the 10-year yield also collaborates with the upside.
- Attention is now on the US inflation figures tracked by the CPI.
USD/JPY navigates within a narrow trading range and manages to regain some composure and the positive ground after dropping to multi-day lows near 105.20.
USD/JPY looks to yields, data
USD/JPY reverses two consecutive sessions with losses on turnaround Tuesday, although the recovery appears to have met quite a tough hurdle in the mid-105.00s for the time being.
The bounce off earlier lows comes in tandem with the better tone in the greenback amidst the prevailing mild bias towards the risk aversion mood. In addition, yields of the key US 10-year reference rebound from earlier lows near 0.74% and also help with the uptick in the pair.
Shifting to the speculative front, net longs in the Japanese safe haven receded to multi-week lows around 21K contracts during the week ended on October 6th and according to the latest CFTC Positioning Report.
Data wise on Tuesday, the Japanese Tankan Index “improved” a tad to -26 (from -29) for the current month. Later in the session, US CPI during September should grab all the attention along with the NFIB Index and the IBD/TIPP Index.
USD/JPY levels to consider
As of writing the pair is gaining 0.12% at 105.45 and a surpass of 105.74 (55-day SMA) would aim to 106.10 (monthly high Oct.6) and finally 106.44 (100-day SMA). On the flip side, immediate support is located at 105.24 (weekly low Oct.12) seconded by 104.94 (monthly low Oct.2) and then 104.00 (monthly low Sep.21).
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