- A modest pullback in the US bond yields seemed to weigh on the USD.
- The safe-haven JPY further benefited from the prevalent cautious mood.
- The downside seems limited amid optimism over a US-China trade deal.
The USD/JPY pair edged lower through the Asian session on Wednesday and has now slipped below the 109.00 handle, eroding a part of the overnight strong positive move.
The pair continued with its struggle to capitalize on the momentum beyond the very important 200-day SMA and once again witnessed a modest pullback from the 109.25-30 region, or three-month tops set in October.
Combination of factors prompts some long-unwinding
As investors looked past Tuesday's upbeat US ISM non-manufacturing PMI, a modest pullback in the US Treasury bond yields kept the US Dollar bulls on the defensive and prompted some long-unwinding trade on Tuesday.
The pair snapped three consecutive days of winning streak and was further pressurized by the prevalent cautious mood around the global financial markets, which tend to underpin the Japanese Yen's perceived safe-haven demand.
Meanwhile, the intraday downtick seemed rather unaffected by the disappointing release of the final Jibun Bank Japan Services PMI, which fell into contraction territory in October for the first time since September 2016.
The downside, however, is likely to remain cushioned amid growing optimism over a possible US-China trade deal later this month and hopes that Trump administration could roll back some of the tariffs on Chinese goods.
In absence of any major market-moving economic releases from the US, traders are likely to take cues from a scheduled speech by the Chicago Fed President Charles Evans, due later during the early North-American session.
Technical levels to watch
|Today last price||108.96|
|Today Daily Change||-0.22|
|Today Daily Change %||-0.20|
|Today daily open||109.18|
|Previous Daily High||109.26|
|Previous Daily Low||108.5|
|Previous Weekly High||109.29|
|Previous Weekly Low||107.89|
|Previous Monthly High||109.29|
|Previous Monthly Low||106.48|
|Daily Fibonacci 38.2%||108.97|
|Daily Fibonacci 61.8%||108.79|
|Daily Pivot Point S1||108.7|
|Daily Pivot Point S2||108.22|
|Daily Pivot Point S3||107.94|
|Daily Pivot Point R1||109.46|
|Daily Pivot Point R2||109.74|
|Daily Pivot Point R3||110.22|
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