• Fresh USD upsurge fails to assist in building on the overnight bullish breakout.
• Bears seemed to track the ongoing retracement slide in the US bond yields.
• Cross-driven weakness further collaborates to the pair’s offered tone.
The USD/JPY pair extended its steady decline from 3-1/2 month tops and is currently placed at session lows, around the 110.10-15 region.
Despite a combination of supportive factors, the pair seemed struggling to build on overnight bullish breakout beyond the very important 200-day SMA and held on to its weaker tone through the mid-European session.
The US Dollar resumed with its recent bullish run but failed to provide any fresh bullish impetus. Even the prevalent positive trading sentiment around the European equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal, also did little to lend any support.
Bears seemed to be tracking the ongoing retracement slide in the US Treasury bond yields, with some cross-driven weakness, stemming out of the latest leg of sharp fall in the EUR/JPY cross, further collaborated to the pair's modest retracement on Wednesday.
Despite a goodish pull-back, the pair has managed to hold its neck above the key 110.00 psychological mark as traders now look forward to the US housing market data and Atlanta Fed President Raphael Bostic's scheduled speech for some fresh impetus during the early NA session.
Technical levels to watch
A follow-through retracement below the 110.00 handle is likely to prompt some long-unwinding trade and accelerate the fall towards 109.40 horizontal support before the pair eventually drops to retest the 109.00 round figure mark.
On the flip side, bulls would be eyeing for a sustained move beyond the 110.35 immediate hurdle, above which the pair seems more likely to head towards reclaiming the 111.00 handle en-route its next resistance near the 111.20-25 region.
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