USD/JPY turns negative, drifts back closer to Thursday’s 7-week lows
|- USD/JPY drifted back into the negative territory for the fifth consecutive session on Friday.
- The prevalent selling bias surrounding the USD was seen as a key factor exerting pressure.
- Bears might still aim to retest July monthly swing lows support, around the 104.20-15 area.
The USD/JPY pair struggled to capitalize on its Asian session positive move and has now dropped to the lower end of its daily trading range, around the 104.65-60 region.
The pair gained some positive traction on the last day of the week and moved away from seven-week lows, around mid-104.00s touched on Thursday. The uptick was sponsored by a positive tone around the Asian equities, which undermined the Japanese yen's safe-haven demand.
Bulls further took cues from a modest pickup in the US Treasury bond yields. However, the Bank of Japan's less gloomy view on the economy extended some support to the JPY. This coupled with the prevalent selling bias around the US dollar capped the upside for the USD/JPY pair.
As investors looked past not so dovish FOMC policy statement, the greenback came under some renewed selling pressure after Thursday's rather unimpressive US economic data. A weaker USD dragged the USD/JPY pair back into the negative territory for the fifth consecutive session.
It will now be interesting to see if the pair is able to find any support at lower levels or bears aim back to challenge July monthly swing lows support near the 104.20-15 region. Market participants now look forward to the release of the Michigan Consumer Sentiment Index for September for some trading impetus on the last day of the week.
Technical levels to watch
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