“¢ Intraday recovery in equities undermines JPY’s safe-haven demand.
“¢ A modest USD uptick further collaborates to the intraday recovery.
“¢ Traders now eye US consumer confidence data for a fresh impetus.
The USD/JPY pair managed to reverse an early European session dip to near two-week lows and is currently placed in the neutral territory, around mid-109.00s.
After yesterday’s positive move, the pair came under some renewed selling pressure on Tuesday. A slight deterioration in the global risk sentiment underpinned the Japanese Yen’s and exerted some downward pressure on the major.
The bearish pressure intensified in the wake of a free fall in the US Treasury bond yields. In fact, yields on the benchmark 10-year US government bond fell to its lowest level since Oct. 2017 and dragged the pair to an intraday low level of 109.20.
However, an intraday recovery in the European equity markets, coupled with a pickup in the US Dollar demand helped stall the intraday slide, rather turned out to be key factors behind the pair’s modest intraday recovery of around 25-30 pips.
It would now be interesting to see if bulls are able to capitalize on the move or the attempted bounce is still seen as a selling opportunity amid a further escalation in the US-China trade tensions and rising risk of a full-blown trade war between the world’s two largest economies.
Technical levels to watch
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