USD/JPY in search of a firm direction, stuck in a range below 114.00 handle
| • A modest USD uptick extends some support at the start of a new week.
• Reviving safe-haven demand underpins JPY and seemed to cap gains.
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the Asian session on Monday.
With investors looking past Friday's mixed US monthly jobs report, the US Dollar caught some bids at the start of a new trading week and extended some support to the major.
Further gains, however, remained capped below the 114.00 handle amid weaker tone surrounding equity markets, which was seen underpinning the Japanese Yen's safe-haven demand.
Despite the fact that PBoC announced to add more stimulus to the market by cutting the reserve requirement ratio (RRR) 1ppt, effective 15 October, Chinese equities suffered their biggest loss since June this year.
Adding to this, resurfacing Italian budgetary concerns triggered a fresh wave of selling in the European equity markets and provided an additional boost to perceived safe-haven assets.
Traders, however, seemed reluctant to place any aggressive bets in wake of a holiday in the US markets and eventually led to a range-bound/subdued price-action through the early European session.
Technical levels to watch
The 113.55-50 region now seems to have emerged as an immediate support, below which the pair is likely to accelerate the corrective slide further towards testing the 113.00 handle.
On the flip side, the 114.00 mark might continue to act as an immediate hurdle, which if cleared should assist the pair to head back towards challenging the 114.50-55 supply zone.
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