The USD/JPY pair managed to recover majority of its early losses to session low near 112.80 region and has now moved closer to the top end of the daily trading range.
Rising geopolitical tensions in the Korean peninsula, especially after N. Korea's missile launch drove investors to traditional safe-haven assets and was seen weighing on the major during early Asian session on Wednesday. With some signs of stability returning back in global financial markets, as depicted by a recovery in Asian equity markets, fading safe-haven demand helped the pair to regain traction at lower levels.
It, however, remains to be seen if the pair is able to build on the recovery move and surpass Monday's 1-1/2-month highs resistance near mid-113.00s amid retracing US Treasury bond yields, which failed to assist the US Dollar to build on its recent cautious rebound from nine-month lows touched last week.
Investors now look forward to today's important release of FOMC minutes from the June meeting for some fresh insight over the Fed's near-term monetary policy outlook, which along with Friday's NFP would eventually help determine the pair's near-term direction.
Valeria Bednarik, Chief Analyst at FXStreet writes:"The short term picture for the pair shows that the upward momentum eased, but also that the risk remains towards the upside, as the 100 SMA extends its advance above the 200 DMA, both well below the current level, while the RSI indicator consolidates around 61. Additionally, the pair recovered after briefly breaking below the 23.6% retracement of its latest decline, the immediate support at 112.90."
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