USD/JPY remains confined in a narrow trading range
| • Struggling near one-month lows amid fresh USD selling.
• Fading safe-haven demand fails to lend any support.
The USD/JPY pair lacked any firm directional bias and remained confined within a 25-pips narrow trading range just above the 112.00 handle.
A fresh wave of US Dollar selling bias, triggered by a sharp recovery in the EUR/USD major, kept a lid on any meaningful recovery from over 1-month lows touched earlier today.
However, a modest rebound witnessed around the US Treasury bond yields, pointing to easing safe-haven demand amid some signs of stability in equity markets, partly offset USD weakness and helped the pair to hold its neck just above the 112.00 handle through the European session.
There isn't any market moving economic releases due on Monday and hence, broader market risk sentiment/the US bond yield dynamics would continue to act as key determinants of the pair's movement.
Meanwhile, the ECB President Mario Draghi’s testimony-led volatility in the markets, coupled with fresh developments over the latest political scenario in Germany would influence the Japanese Yen’s safe-haven demand and provide some impetus.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "Technical readings in the daily chart present a strong bearish stance, as indicators head south almost vertically within negative territory, as the price nears the 100 and 200 DMAs, both converging around 111.50, a critical support for the upcoming sessions, as below it, the downward momentum will likely accelerate."
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