USD/JPY rebounds from monthly lows, back near 109.00 mark

   “¢   Maio’s comments ease fears over an Italian exit and helped pared early steep losses.
   “¢   Resurgent USD demand provides an additional boost and collaborates to the rebound.
   “¢   Traders eye CB’s US consumer confidence index for some short-term impetus.

The USD/JPY pair maintained its offered tone through the mid-European session, albeit has managed to rebound around 45-pips from one-month lows.  

The pair extended overnight retracement and came under some intense selling pressure amid a fresh wave of global risk-aversion trade, which underpinned the Japanese Yen’s safe-haven appeal. The risk-off mood was evident from a sell-off across equity markets and the ongoing slump in the US Treasury bond yields.  

Market fears, however, eased a bit after the Five Star leader Luigi Di Maio said that he never sought Italian exit from the European Union. This coupled with a strong US Dollar upsurge to fresh yearly tops, closer to the key 95.00 psychological mark, further collaborated to the pair’s modest rebound from the lowest level since April 23.

Moving ahead, today’s scheduled release of Conference Board’s consumer confidence index from the US would now be looked upon for some impetus, while the broader market risk sentiment might continue to play a key role in influencing the pair’s price-action.

Technical levels to watch

A sustained recovery back above the 109.00 handle could lift the pair back towards 109.35-40 resistance before the momentum further gets extended towards the 109.80-85 supply zone. On the flip side, weakness back below mid-108.00s might turn the pair vulnerable to slide further below the 108.00 handle and test 107.75-70 support area.