The Japanese Yen came under selling pressure on Tuesday and has now eroded a major part of the previous session’s up-move to YTD tops. What technical levels should traders now watch?
2 October, GKFX – The pair continued with its struggle to build on the positive momentum further beyond the 114.00 handle and seemed rather unaffected by a goodish pickup in the US Dollar demand.
A slight deterioration in investors’ risk-appetite, further reinforced by a modest retracement in the US Treasury bond yields, benefitted the Japanese Yen’s safe-haven status and prompted some long-unwinding trade.
Japanese Yen Under Selling Pressure
The Japanese Yen was further underpinned by today’s release of a slightly better than expected consumer confidence data, coming in at 43.4 for September as compared to 43.3 recorded in the previous month.
Traders now seemed inclined to take some profits off the table, especially after the recent upsurge of over 360-pips since early September, and turned out to be one of the key factors exerting some downward pressure.
There isn’t any major market-moving economic data due for release from the US and hence, the broader market risk sentiment might play an important role in influencing the pair’s momentum ahead of the Fed Chair Jerome Powell’s scheduled speech later during the US trading session.
Technical levels to watch
Any subsequent retracement is likely to find strong support near the 113.35-30 horizontal zone, below which the corrective slide could further get extended towards the 113.00 round figure mark.
On the flip side, the 114.00 handle remains might continue to act as an immediate strong hurdle, which if cleared has the potential to lift the pair further towards 114.45-50 intermediate supply zone ahead of the 114.75 resistance.
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