The USDJPY pair extended its sharp intraday retracement slide and is currently placed at the lower end of its daily trading range, below mid-113.00s.
December 3, GKFX – The latest optimism over the truce between the world's two largest economies led to a fresh wave of risk-on trade at the start of a new trading week and eventually weighed heavily on the Japanese Yen's safe-haven demand.
The pair opened with a bullish gap and climbed to a multi-day high level of 113.82 in reaction to the news that the US and China have agreed not to impose additional trade tariffs for at least 90 days, rather attempt to bridge the differences via new trade talks.
The pair, however, started losing steam at higher levels in wake of a heavily offered tone surrounding the US Dollar, which failed to find any support from a goodish pickup in the US Treasury bond yields amid firming prospects for a gradual monetary policy tightening cycle.
Moving ahead, today's scheduled speeches by influential FOMC members and the release of US ISM manufacturing PMI will now be looked upon for some fresh impetus later during the early North-American session.
USDJPY Technical Forecast
Valeria Bednarik, FXStreet's own American Chief Analyst explains:
“The pair has spent the last 4 weeks inside a well-limited 200 pips' range, unable to extend gains beyond the 114.00 figure beyond a couple of short-lived spikes. The base of the range is 112.30, the low set on November 20.
In the daily chart, the 100 DMA comes at 112.25, reinforcing the support area and indicating an increased downward potential on a break below the level.”
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