9 October, GKFX – The pair struggled to build on overnight goodish rebound of around 40-pips from 1-1/2 week low level of 102.82 and remained under some selling pressure for the fourth consecutive session on Tuesday.
A combination of factors kept investors on edge and underpinned the Japanese Yen’s safe-haven status, which was eventually seen exerting some downward pressure.
Against the backdrop of escalating US-China trade tensions, political turmoil in Europe – led by Italy’s budget proposals, dampened investors’ appetite for riskier assets and the same was evident from persistent selling across global equity markets.
Japanese Yen Recovers
However, a fresh leg of an upsurge in the US Treasury bond yields, supported by firming prospects for gradual Fed rate hike through the end of this year and beyond, helped the US Dollar to regain positive traction and limit any deeper losses.
It would now be interesting to see if the pair is able to build on the recovery move or the uptick is seen as an opportunity to initiate some fresh bearish positions amid absent relevant market moving economic releases.
Technical levels to watch
Any subsequent up-move is likely to confront fresh supply near the 113.50-55 region, above which the pair is likely to aim towards reclaiming the 114.00 handle.
On the flip side, the 113.00-112.80 region now becomes an immediate strong support to defend, which if broken might turn the pair vulnerable to accelerate the slide towards mid-112.00s en-route the 112.30-25 support area.
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