• Sliding US bond yields offset resurgent USD demand.
• Safe-haven demand adds to the downward pressure.
The USD/JPY pair held weaker through the mid-European session and is currently placed at the lower end of the daily trading range, around 113.35-30 band.
The pair struggled to gain any positive traction despite a goodish pickup in the US Dollar demand. The prevalent cautious environment around global financial markets, accompanied with a sharp slide in the US Treasury bond yields exerted some downward pressure on major.
Adding to this, the latest political developments in the UK provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to the pair's weaker tone at the start of a new trading week.
Traders, however, seemed reluctant to place aggressive bets ahead of this week's key US macro data, including the latest inflation figures on Wednesday. In the meantime, key speeches by the BOJ Governor Haruhiko Kuroda and the Fed Chair Janet Yellen would be looked upon for fresh impetus.
Technical outlook
Omkar Godbole, Editor and Analyst at FXStreet writes: "Despite the inverse head and shoulders breakout, a bullish falling channel breakout and a bullish RSI, the spot is struggling to break above the 1-hour 100-MA. The 1-hour 50-MA still descending (favors downside in the spot)."
"A convincing move above 114.00 (resistance of ascending trendline) would push the RSI into bullish territory and shall open doors for re-test of 114.45 (Oct. 27 high). Still, caution is advised as the area above 114.00 has proved to a tough nut to crack" he added.
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