USD/JPY slides to session lows around 110.70 level, weighed down by reviving safe-haven demand

   “¢   Renewed uncertainty over US-China trade talks prompted some fresh selling.
   “¢   Geopolitical tensions/global growth concerns add to the downward pressure.
   “¢   Traders now eye advance US Q4 GDP growth print for some fresh impetus.

The USD/JPY pair met with some fresh supply and eroded a part of previous session’s goodish up-move back closer to YTD tops.  

The pair continued with its struggle to build on the momentum further beyond the 111.00 handle and was now being weighed down by reviving safe-haven demand amid a fresh wave of global risk-aversion trade.

Investors turned cautious in wake of some renewed uncertainty over the progress in US-China trade talks after not so optimistic trade-related comments by the US Trade Representative Robert Lighthizer on Wednesday.

This coupled with dismal Chinese manufacturing PMI print provided fresh evidence that the long-standing US-China trade disputes were actually taking its toll on the global economy and further dented investors’ risk-sentiment.

Meanwhile, escalating geopolitical tensions between India and Pakistan provided an additional boost to the Japanese Yen’s perceived safe-haven status and added to the downward pressure surrounding the major.

The risk-off mood was evident from a sharp reversal in the US Treasury bond yields, which failed to assist the US Dollar to build on the overnight goodish bounce from three-week lows and further collaborated to the weaker tone.

Looking at the broader picture, the pair has been oscillating within a broader trading range over the past two-week or so and seemed to wait for a fresh catalyst before determining the next leg of a directional move.

Today’s US economic docket, highlighting the release fo advance Q4 GDP growth figures and the Fed’s preferred measure of inflation – core PCE, will now be looked upon for fresh impetus later during the North-American session.

Technical levels to watch