The USDJPY pair managed to reverse an Asian session dip to the very important 200-day SMA support and filled the weekly bearish gap, albeit lacked any strong follow-through.
December 24, GKFX – Sentiment in financial markets remained fragile on fears of a global economic slowdown and continued underpinning the Japanese Yen's safe-haven demand.
Adding to this, a combination of negative forces exerted some fresh downward pressure on the US Dollar and further collaborated to the pair's weaker opening at the start of a holiday-shortened week.
The greenback struggled to build on Friday's goodish rebound from one-month lows and was now weighed down by a partial US government shutdown. This coupled with concerns over US economic prospects, amid the recent fall in the US Treasury bond yields, might now keep a lid on any meaningful recovery move.
The pair, however, has been showing some resilience near 200-day SMA support. With liquidity drying up ahead of the year-end holiday season, traders might be reluctant to place any aggressive bets, which might eventually turn out to be the only factor that might help limit any further downside, at least for the time being.
USDJPY Technical Analysis
The 111.20-30 region now seems to have emerged as an immediate resistance, above which the pair is likely to make an attempt towards clearing the 111.75-80 intermediate supply zone en-route the 112.00 handle.
On the flip side, sustained weakness below the 110.90-80 region (200-DMA) now seems to pave the way for an extension of the bearish trajectory towards challenging the key 110.00 psychological mark.
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