“¢ US bond yields retreat from 4-month tops and exert some pressure.
“¢ Subdued USD demand does little to provide any meaningful impetus.
The USD/JPY pair traded with a mild negative bias for the second consecutive session, albeit has still managed to hold above the 112.00 handle.
After an initial uptick to an intraday high level of 112.34, the pair met with some fresh supply and moved further away from near two-month tops touched in the previous session.
With investors still assessing the impact of lower than expected US-China trade tariffs, overnight upsurge in the US Treasury bond yields failed to assist the pair to build on Tuesday’s strong up-move.
The benchmark 10-year bond yields started retreating from four-month highs, which coupled with a subdued US Dollar demand exerted some downward pressure through the Asian session on Thursday.
Meanwhile, a mixed sentiment around equity markets did little to influence the Japanese Yen’s safe-haven demand, albeit seems to be the only factor helping limit any immediate sharp decline.
Moving ahead, today’s second-tier US economic releases – Philly Fed Manufacturing Index, usual initial weekly jobless claims and existing home sales data, will now be looked upon for some fresh impetus.
Technical outlook
“Tuesday’s bullish outside-day candle and a close above 112.15 (Aug, 1 high) bolstered the already bullish setup. So, it seems safe to say that USD bulls are still in a hunt for yearly highs above 113.00,” writes Omkar Godbole, Analyst and Editor at FXStreet.
He further added, “a close below the rising (bullish) 10-day MA of 111.78 would abort the bullish view.”
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