USD/JPY witnessed some selling on Thursday and snapped two consecutive days of the winning streak.
Some follow-through USD pullback from multi-month tops prompted some selling around the major.
A modest pickup in demand for the safe-haven JPY contributed to the fall amid sliding US bond yields.

The USD/JPY pair refreshed daily lows in the last hour, though managed to defend the key 110.00 psychological mark and quickly recovered few pips thereafter.

The pair stalled this week’s solid rebound from the vicinity of the 109.00 mark, or near one-month lows and edged lower on Thursday, snapping two consecutive days of the winning streak. Following a brief consolidation through the mid-European session, the US dollar witnessed some selling and was seen as a key factor exerting some pressure on the USD/JPY pair.

In fact, the USD Index extended the previous day’s pullback from the highest level since early April and was weighed down by a strong pickup in demand for the European currencies. The selling bias picked up pace after the US macro data showed that jobless claims unexpectedly jumped to 419K during the week ended July 16 from the previous week’s upwardly revised reading of 368K.

Bearish traders further took cues from a modest pullback in the US Treasury bond yields and a softer opening in the US equity markets. This, along with worries about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus, underpinned the safe-haven Japanese yen and contributed to the USD/JPY pair’s intraday decline.

Despite the negative factors, bulls, so far, have managed to defend the 110.00 mark. This coincides with 200-hour SMA, which should now act as a key pivotal point for intraday traders. Sustained weakness below might prompt some technical selling and drag the USD/JPY pair back towards the 109.70-65 horizontal support en-route 100-day SMA, around mid-109.00s.

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