USD/JPY headed back to daily lows, closer to 107.00 handle
| • USD consolidates hawkish FOMC minutes-led strong gains.
• Reviving safe-haven demand offsets USD strength.
The USD/JPY pair stalled its steady rebound near the 107.60 region and has now retreated back closer to the Asian session lows.
The pair snapped four consecutive days of winning streak and was being weighed down by a fresh wave of global risk-aversion trade, which was seen underpinning the Japanese Yen's safe-haven appeal.
Meanwhile, the US Dollar also seems to have entered a bullish consolidative phase, especially after yesterday's upsurge following a hawkish assessment of the latest FOMC meeting minutes, and also did little to provide any fresh bullish impetus to the major.
It would now be interesting to see if bulls are able to regain their dominant position or the pair continues with its downfall amid relatively thin US economic docket, highlighting the release of usual weekly jobless claims data later during the early NA session.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “While a test of the descending trendline resistance of 108.25 is likely, further gains could be transient, especially if the 10-year US Treasury yield breaks above 3 percent. Also, the weekly 5-MA is sloping downwards and is currently seen at 108.25. So, gains above the same are to be viewed with caution.”
“On the downside, only an end of the day close below the 5-day MA would shift attention to recent low of 105.00,” he further added.
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