USD/JPY retreats from 200-DMA hurdle, refreshes session low
• Fails to build on Friday’s modest recovery from 2-month lows.
• Risk-off mood underpinning JPY’s safe-haven demand.
• A modest uptick in US bond yields failing to support the USD.
The USD/JPY pair came under some renewed selling pressure on Monday and eroded part of previous session's modest recovery gains from over 2-month lows.
The pair failed to build on the early uptick and retreated from the very important 200-day SMA amid reviving safe-haven demand, which underpinned the Japanese Yen and offset a modest pickup in the US Treasury bond yields.
Meanwhile, concerns that the Fed's monetary policy tightening cycle could be more gradual than initially expected kept the US Dollar bulls on the back-foot and further collaborated to the pair's retracement to session lows near the 111.35-30 region.
With the only scheduled release of new home sales data from the US, broader market risk sentiment and the USD price dynamics would remain key determinants of the pair's momentum on the first day of a data-heavy week.
• USDJPY: Stabilization in technical tone? - BBH
Omkar Godbole, Analyst and Editor at FXStreet writes: "The decline from the 200-day MA of 111.70 to 111.35 also means a bullish breakout attempt has failed. The RSI remains bearish, furthermore, the 50-MA, 100-MA and 200-MA favor downside. Clearly, the 4-hour chart indicates the pair is set to take out the support 111.03 (50% Fib R of Sep. low and Nov. high) and extend losses to 110.00 levels."