USD/JPY retakes 114.00 and beyond
• Catches fresh bids on fading safe-haven demand.
• Rebounding US bond yields also lending support.
The USD/JPY pair stalled overnight sharp retracement slide from nearly 8-month tops and caught some fresh bids on Tuesday.
Uncertainty over the Republicans tax bill and expectations that any rise in inflation would be slow kept the US Dollar bulls on the back-foot on Monday and prompted some profit taking at higher levels.
However, a modest rebound in the US Treasury bond yields extended some support to the USD through the Asian session on Tuesday and helped the pair to reverse previous session’s downslide.
Meanwhile, a slight improvement in investors' risk appetite, as depicted by the prevailing positive trading sentiment around equity markets, was also seen weighed on the Japanese Yen's safe-haven appeal and further collaborated to the pair's up-move back above the 114.00 handle.
In the absence of any major market moving economic releases, the pair remains at the mercy of broader market risk sentiment and the US bond yield dynamics.
Technical levels to watch
A follow-through up-move is likely to confront resistance near the 114.40-45 region, above which the pair is likely to make a fresh attempt towards reclaiming the key 115.00 psychological mark with some intermediate resistance near 114.75 area (yesterday's high).
On the downside, weakness back below the 114.00 mark might continue to find support near the 113.65 area, which if broken might trigger a corrective slide and drag the pair towards 113.25 intermediate support en-route the 113.00 handle.