Home USD/JPY off lows, still in red near 109.30 level
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USD/JPY off lows, still in red near 109.30 level

   “¢   USD profit-taking slide aggravated by retracing US bond yields.
   “¢   Positive equities/slightly better US data does little to lend support.

The USD/JPY pair extended its steady decline from the 109.50-60 region and refreshed session lows during the early NA session, albeit quickly recovered few pips thereafter.

Thursday’s disappointment from the latest consumer inflation figures hinted that the Fed won’t need to raise interest rates faster than forecasted and the same was evident from a follow-through retracement in the US Treasury bond yields, which kept exerting bearish pressure on the US Dollar.

Even a slightly better-than-expected release of the US Prelim UoM Consumer Sentiment index for May, the only highlight from today’s US economic docket, did little to lend any support to the greenback.

Traders also seem to have negated a strong opening in the US equity markets, which tends to weigh on the Japanese Yen’s safe-haven demand, with the USD price dynamics acting as an exclusive driver of the pair’s slide to an intraday low level of 109.15.

Despite the ongoing pull-back from the key 110.00 psychological mark, the pair, so far, has managed to hold in positive territory for the week and above the 109.00 handle. Hence, it would prudent to wait for a strong follow-through weakness before positioning for any further declines in the near-term.

Technical outlook

Valeria Bednarik, FXStreet’s own Chief Analyst writes: “The 4 hours chart for the pair shows that it is at risk of extending its decline, as technical indicators maintain their bearish slopes in negative territory, although the path is not that clear, as the pair has several supports accumulated in a tight range, a bullish 100 SMA, a daily ascendant trend line, and multiple lows in the 108.70 region, from where the pair has been bouncing this month.”
 

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