USD/JPY trades with modest losses, below mid-105.00s

USD/JPY edged lower on Monday and snapped five days of the winning streak.
A modest USD pullback was seen as a key factor exerting pressure on the pair.
The risk-on mood undermined the safe-haven JPY and might help limit losses.

Haresh Menghani FXStreet

The USD/JPY pair refreshed daily lows, around the 105.25 region in the last hour, albeit lacked any strong follow-through and quickly recovered few pips thereafter.

The pair failed to capitalize on its early uptick to the 105.70 region and witnessed a modest pullback on the first day of a new trading week. The USD/JPY pair, for now, seems to have snapped five consecutive days of the winning streak and the downtick was exclusively sponsored by a softer tone surrounding the US dollar.

Investors remain worried that the current US economic recovery could falter amid the lack of any further fiscal stimulus measures. This, along with the political uncertainty in the run-up to the US Presidential election in November prompted some USD profit-taking, which, in turn, exerted pressure on the USD/JPY pair.

However, the prevalent upbeat market mood – as depicted by a strong rally in the US equity futures – undermined the Japanese yen's safe-haven demand and helped limit any deeper losses for the USD/JPY pair. Hence, it will be prudent to wait for some strong follow-through selling before positioning for any further downside.

In the absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics will continue to play a key role in influencing the momentum. The key focus, however, will be on the first presidential debate scheduled for Tuesday, which might infuse some volatility in the FX market.

Technical levels to watch

USD/JPY

Overview
Today last price	105.39
Today Daily Change	-0.22
Today Daily Change %	-0.21
Today daily open	105.61

Trends
Daily SMA20	105.63
Daily SMA50	105.88
Daily SMA100	106.68
Daily SMA200	107.64

Levels
Previous Daily High	105.7
Previous Daily Low	105.24
Previous Weekly High	105.7
Previous Weekly Low	104
Previous Monthly High	107.05
Previous Monthly Low	105.1
Daily Fibonacci 38.2%	105.52
Daily Fibonacci 61.8%	105.42
Daily Pivot Point S1	105.33
Daily Pivot Point S2	105.06
Daily Pivot Point S3	104.87
Daily Pivot Point R1	105.79
Daily Pivot Point R2	105.98
Daily Pivot Point R3	106.25

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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