“¢ Renewed USD selling/weaker bond yields keep a lid on the overnight attempted bounce.
“¢ Bulls seemed rather unimpressed by today’s softer Japanese core CPI/manufacturing PMI.
The USD/JPY pair failed to capitalize on the overnight attempted rebound from five-week lows and traded with a mild negative bias through the early European session on Friday.
The US Dollar struggled to preserve/build on the previous session’s goodish recovery gains from the lowest level since early February and remained depressed on the back of an ultra-dovish FOMC statement, indicating that there will be no more rate hikes in 2019.
Bearish traders further took cues from the ongoing decline in the US Treasury bond yields, which coupled with a cautious mood around equity markets, further underpinned the Japanese Yen’s safe-haven status and exerted some downward pressure.
Meanwhile, today’s release of softer Japanese economic data – national core CPI and flash manufacturing PMI, failed to provide any additional boost to the domestic currency and turned out to be the only factors lending some support/limit deeper losses.
There isn’t any major market-moving economic data due for release from the US and hence, the USD price dynamics/broader market risk sentiment might continue to influence the price action/produce some trading opportunities on the last trading day of the week.
Technical levels to watch
Immediate support is pegged near the 110.60 area and is closely followed by the 110.30-25 region, below which the pair is likely to break below the key 110.00 psychological mark and test the 109.70-60 support zone. On the flip side, the 111.00 handle might continue to cap any attempted bounce, which if cleared might trigger a short-covering rally back towards the very important 200-day SMA, currently near the 111.45-50 region.
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