USD/JPY rejected near 200-DMA, weakens back below 110.00 mark

   “¢   Renewed USD selling fails to assist the pair to build on overnight rebound.
   “¢   JPY benefits from reviving safe-haven demand and exerts additional pressure.
   “¢   Traders now eye US durable goods orders data for some fresh impetus.  

The USD/JPY pair once again failed to clear the very important 200-day SMA barrier and has now erased all of its gains recorded in the previous session.

On Tuesday, a goodish pickup in the US Dollar demand helped the pair to stage a solid rebound from 55-day SMA support or two-week lows. The up-move, however, lacked any strong follow-through and ran out of steam near the 110.20 hurdle amid some renewed US Dollar weakness.  

The USD struggled to build on overnight rebound from two-week lows, with fears about a full-blown US-China trade war and retracing US Treasury bond yields prompting some fresh selling on Wednesday.

Meanwhile, a weaker opening across European equity markets provided an additional boost to the Japanese Yen’s safe-haven appeal and further collaborated to the pair’s fall to fresh session lows, around the 109.80-75 region.

It would now be interesting to see if the pair is able to attract any fresh buying interest at lower levels or continues its downfall back towards an important support near the 109.40-35 region.

Next of relevance would be the release of US durable goods orders data, which along with a scheduled speech by the Fed Governor Randal Quarles and broader market risk sentiment would play a key role in influencing the pair’s momentum on Wednesday.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “A daily close below the 109.67 (50-day MA + rising trendline) would signal the rally from the March 26 low of 104.63 has ended and will likely allow a drop to 108.82 (38.2 percent Fibonacci retracement of 104.63-111.40).”