USD/JPY recovers early lost ground, bulls await a sustained move beyond 106.00 handle
- A sudden turnaround in equities weighed on the JPY’s safe-haven status and helped gain traction.
- Upbeat US macro data remained supportive; falling US bond yields capped any further up-move.
The USD/JPY pair has now recovered around 40-pips from daily lows, with bulls now looking to extend the momentum further beyond the 106.00 round figure mark.
Having faced rejection near 100-period EMA on the 4-hourly chart in the previous session, the pair met with some fresh supply on Tuesday and was being weighed down by reviving safe-haven demand for the Japanese Yen amid fading optimism over a quick resolution of the prolonged US-China trade disputes.
Bulls take cues from improving risk sentiment
This coupled with a fresh leg of a downfall in the US Treasury bond yields undermined the US Dollar demand and further collaborated to the intraday slide. However, a sudden turnaround in the global risk sentiment helped limit further losses instead helped the pair to find decent support near the 105.60 region.
On the economic data front, the upbeat release of Conference Board's US Consumer Confidence Index - coming in at 135.1 for August and an upward revision of the previous month's already stronger reading - remained supportive, albeit failed to provide any meaningful impetus.
Hence, it will be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further near-term appreciating move beyond the recent swing highs resistance near the 106.70-75 region.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
