USD/JPY headed back to Monday’s four-month lows, Fedspeak in focus
|Having failed to build on Asian session tepid recovery move to 110.80 region, the USD/JPY pair ran through fresh offers and is now headed back to four-month lows touched on Monday.
Currently trading around 110.25-30 area, testing session lows, a fresh wave of US Dollar selling pressure, in tandem with slide in the US treasury bond yields, is seen weighing on the major. Adding to this, a modest retracement in the US equity markets futures, now pointing to a slightly weaker opening, extended additional support to the Japanese Yen's safe-haven appeal and is contributing to the offered tone surrounding the major.
Meanwhile, possibilities of some stops being triggered, on a sustained break back below mid-110.00s, seems to have further collaborated to the pair's downslide back closer to previous session's multi-month lows.
On the economic data front, better-than-expected goods trade balance and wholesale inventories data from the US helped stall the downslide, at least for the time being.
Next of relevance would be the release of Conference Board's Consumer Confidence Index for March ahead of a slew of Fedspeaks, including the Fed Chair Janet Yellen, which would be closely watched for some immediate respite for the US Dollar bulls.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes, "a break below 110.00 levels could trigger stops on the positional longs and yield a quick fire sell-off to 109.50 and possibly to 109.13 (38.2% fib retracement of 125.856-98.79)."
He further added, "the pair may have found a temporary bottom at 110.11 and the technical recovery could take the pair higher to 111.38 (23.6% fib of 115.49-110.11)."
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