USD/JPY bounces off multi-day lows, steady above mid-109.00s ahead of US ISM PMI

USD/JPY attracted some dip-buying on Tuesday and stalled its recent corrective slide.
The safe-haven JPY was weighed down by the prevalent risk-on mood, COVID-19 jitters.
An uptick in the US bond yields remained supportive’ sustained USD selling capped gains.

Haresh Menghani FXStreet

The USD/JPY pair managed to recover over 35 pips from multi-day lows and climbed to fresh daily tops, around the 109.65-70 region during the mid-European session.

The pair extended last week's retracement slide from the highest level since April 6 and witnessed some selling through the first half of the trading action on Tuesday. However, a combination of factors helped limit any further losses, rather assisted the USD/JPY pair to find some support near the 109.30-35 region.

The prevalent risk-on environment, as depicted by a relentless rally in the global equity markets, undermined the safe-haven Japanese yen. Apart from this, concerns that an extended state of emergency in Tokyo and eight other prefectures could hinder Japan's fragile economic recovery further acted as a headwind for the JPY.

Bulls further took cues from a goodish pickup in the US Treasury bond yields, though sustained US dollar selling kept a lid on any strong gains for the USD/JPY pair. The USD languished near multi-month lows amid growing market conviction that the Fed will retain its ultra-lose monetary policy for a longer period.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any meaningful upside. Market participants now look forward to the release of the US ISM Manufacturing PMI. This, along with speeches by Fed Vice Chair Randal Quarles and Governor Lael Brainard, would influence the USD price dynamics.

Apart from this, the broader market risk sentiment will play a key role in driving the USD/JPY pair and allow traders to grab some short-term opportunities.

Technical levels to watch

USD/JPY

Overview
Today last price	109.6
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	109.6

Trends
Daily SMA20	109.16
Daily SMA50	109.16
Daily SMA100	107.53
Daily SMA200	106.13

Levels
Previous Daily High	109.94
Previous Daily Low	109.35
Previous Weekly High	110.2
Previous Weekly Low	108.56
Previous Monthly High	110.2
Previous Monthly Low	108.34
Daily Fibonacci 38.2%	109.58
Daily Fibonacci 61.8%	109.71
Daily Pivot Point S1	109.32
Daily Pivot Point S2	109.04
Daily Pivot Point S3	108.74
Daily Pivot Point R1	109.91
Daily Pivot Point R2	110.21
Daily Pivot Point R3	110.49

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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