- A combination of factors failed to assist USD/JPY to capitalize on its modest uptick.
- Diminishing odds for an earlier Fed rate hike kept the USD bulls on the defensive.
- A softer risk tone benefitted the safe-haven JPY and collaborated to cap the major.
USD/JPY is moderating its bounce off 110.8 amid bearish momentum. The yen pair remains inside a two-week-long ascending trend channel formation. Given the declining momentum line, the quote is likely to retest the key 111.00 threshold.
The USD/JPY pair's daily chart shows that Friday's decline fell short of suggesting further declines ahead. The pair keeps developing above the ascending trend-line support providing dynamic support at around 110.35. Technical indicators retreated from their highs, maintaining their bearish slopes but within positive levels.
The 4-hour chart shows that technical indicators retreated sharply from oversold readings and, as the price pierces above 20 level from below , favoring a next bullish move.
In the meantime, the broader market risk sentiment will continue to influence the USD/JPY pair and allow traders to grab some short-term opportunities. That said, the momentum is likely to be limited as investors might prefer to wait on the sidelines ahead of the key event risk.
The material has been provided by InstaForex Company - www.instaforex.com