USD/JPY eases from highs, remains capped below 111.00 handle
| • USD fails to build on a modest rebound, despite surging US bond yields.
• Cautious environment further underpins JPY’s safe-haven demand.
• Focus remains on the Senate vote to fund the government.
The USD/JPY pair struggle to move back above the 111.00 handle and quickly retreated around 20-pips from session tops during the early European session.
With investors looking past a US government shutdown, the ongoing upsurge in the US Treasury bond yields extended some support to the US Dollar and helped the pair to continue finding some support near mid-110.00s.
The pair managed to fill the weekly bearish gap opening but the uptick lacked any strong follow-through momentum and was being capped by a fresh wave of USD selling wave.
Adding to this, a cautious opening across European bourses, which tends to support the Japanese Yen's safe-haven appeal, further collaborated towards keeping a lid, at least for the time being.
In absence of any major market moving economic releases, the US political development, with the Senate expected to vote on advancing a measure to fund the government through Feb. 8, might continue to act as a key determinant of the pair's momentum on the first trading day of the week.
Technical levels to watch
On a sustained move beyond the 111.00 handle, the pair is likely to head towards testing 111.30 supply zone en-route the very important 200-day SMA barrier near the 111.70 region. Meanwhile, on the downside, immediate support remains near mid-110.00s, before which the pair could once again challenge the key 110.00 psychological mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.