• A goodish pickup in the US bond yields helps to bounce off lows.
• Sliding USD/cautious mood now seemed to cap the up-move.
• Traders eye second-tier US economic data for some impetus.
The USD/JPY pair managed to recover around 40-45 pips from session lows, albeit struggled to build on the momentum further beyond the 109.00 handle.
With investors looking past yesterday's softer US macro data, renewed pickup in the US Treasury bond yields was seen as one of the key factors behind the pair's goodish rebound from Asian session low level of 108.54.
Further gains, however, remained capped amid the prevalent negative tone surrounding the US Dollar. The coupled with weakness across European equity markets underpinned the Japanese Yen's safe-haven appeal and further collaborated towards keeping a lid on any strong up-move.
It would now be interesting to see if the pair is able to make it through the 109.00 handle or continues with its near-term corrective slide that began last week from levels closer to mid-111.00s.
Traders now look forward to the second-tier US economic releases - personal income/spending data, core PCE price index, the usual initial weekly jobless claims and Chicago PMI, in order to grab some short-term opportunities.
Technical levels to watch
On a sustained move above the 109.00 handle, a bout of short-covering could lift the pair back towards 109.80-85 supply zone (weekly tops) with some intermediate resistance near the 109.40 level.
Alternatively, weakness back below mid-108.00s could turn the pair vulnerable to head back towards challenging the 108.00 handle before eventually dropping to its next support near the 107.80-70 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.