USD/JPY bulls trying to defend 109.00 handle

The USD/JPY pair met with some fresh supply on Thursday and eroded part of previous session's sharp recovery from 6-day lows.

On Wednesday, the pair tumbled to 108.45 level, the lowest level since August 29, but managed to promptly rebound beyond the 109.00 handle. The recovery move got an additional boost from the US ISM non-manufacturing PMI, which showed services sector growth rebounded in August.

• US: Economy growing solidly - NAB

This coupled with a three-month extension of the US debt ceiling, and renewed optimism over the US President Donald Trump's tax reforms further improved sentiment around the US Dollar and lifted the pair to 109.40 area.

• US Treasury Secretary Mnuchin expects tax bill to be in congress in month

However, the ongoing crisis over N. Korea continues to underpin the Japanese Yen's safe-haven demand and kept a lid on any further up-move for the major. The market remained worried on reports that N. Korea is preparing to launch a new intercontinental ballistic missile as soon as Sept. 9.

• South Korean PM says North Korea may launch a missile on September 9th

In absence of any major market moving economic releases, ECB-led volatility in the FX market might influence broader market risk sentiment and help traders to grab some short-term trading opportunities.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet noted, "the recovery remains corrective, as despite the almost 100 pips' advance, the pair remains below its moving averages in the 4 hours chart, also below the 23.6% retracement of the July/August decline, this last around 109.75. Technical indicators in the mentioned chart have bounced sharply from oversold readings, but remain within negative territory, overall indicating that the upward potential is limited at least as long as the price remains below the mentioned Fibonacci resistance."

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.