USD/JPY slides to session lows, bears await a break below 105.00 mark

• USD/JPY drifts into the negative territory for the fourth consecutive session on Tuesday.
• A pullback in the US bond yields, dovish Fed expectations capped the attempted USD bounce.
• Investors now eye second-tier US economic data for some short-term trading opportunities.

The USD/JPY pair dropped to its lowest level since March 13, with bears now awaiting a sustained break below the key 105.00 psychological mark.

The pair failed to capitalize on its attempted recovery move, instead met with some fresh supply near the 105.70 region. The USD/JPY pair drifted into the negative territory for the fourth consecutive session, also marking the fifth day of a downtick in the previous six, and was pressured by a combination of factors.

Despite the optimism over the next round of the US fiscal measures, the US dollar struggled to preserve its early gains amid an intraday pullback in the US Treasury bond yields. This coupled with speculations of additional stimulus by the Fed further collaborated towards capping the intraday gains for the greenback.

Apart from this, a slight deterioration in the global risk sentiment – as depicted by indications of a negative opening in the US equity markets – underpinned the Japanese yen’s safe-haven demand. This, in turn, collaborated to the USD/JPY pair’s intraday slide of around 60 pips and might have set the stage for further declines.

Market participants now look forward to the US economic data for some impetus. Tuesday’s US economic docket highlights the release of the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index. This along with the broader risk sentiment might influence the JPY price dynamics and produce some trading opportunities.

Technical levels to watch