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USD/JPY eases from tops, up little ahead of Powell

  • USD/JPY gains some follow-through traction for the second straight session on Tuesday.
  • Rising US bond yields remained support; subdued USD demand capped any strong gains.
  • Tuesday’s key focus will remain on the Fed Chair Jerome Powell’s semiannual testimony.

The USD/JPY pair struggled to capitalize on its early uptick and witnessed a modest 10-15 pips intraday pullback from the vicinity of the key 110.00 psychological mark.

The pair added to the previous session's modest uptick and gained some follow-through traction for the second consecutive session on Tuesday amid the prevailing risk-on mood, which tends to underpin the Japanese yen's perceived safe-haven demand.

Intraday uptick lacks follow-through

Bullish traders further took cues from a goodish intraday pickup in the US Treasury bond yields, albeit a subdued US dollar price action failed to provide any additional boost to the major, rather kept a lid on any strong follow-through positive move.

Investors seemed reluctant to place any aggressive bullish bets and preferred to wait on the sidelines ahead of the Fed Chair Jerome Powell's semiannual testimony before the Congress, which might help determine the pair's next leg of a directional move.

Heading into Tuesday's key event risk, the pair seems more likely to continue with its range-bound price action amid absent relevant market moving economic releases from the US.

Technical levels to watch

 

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