• Markit manufacturing PMI hits 7-month low and does little to ease USD bearish pressure.
• Mixed US equities underpin JPY’s safe-haven appeal and add to the downward pressure.
• Resurgent US bond yields help limit downside, at least for the time being.
The USD/JPY pair stalled its up-move at the very important 200-day SMA and has now retreated few pips from session tops, touched earlier today.
The US Dollar weakness remained unabated through the early North-American session and was further weighed down by weaker Markit US flash manufacturing PMI, plunging to a 7-month low level of 54.6in June as compared to 56.4 in the previous month.
Meanwhile, a mixed early hour of trading in the US equity markets, with tech-heavy Nasdaq Composite Index drifting into negative territory, was seen extended some support to the Japanese Yen's safe-haven appeal and further collaborated to the pair's modest retracement from highs.
However, a goodish pickup in the US Treasury bond yields, which although failed to revive the USD demand, helped limit deeper losses, at least of the time being. Nevertheless, the pair continues to oscillate in a familiar trading and remains on track for weekly declines.
Technical levels to watch
The 110.20-25 region (200-DMA) might continue to act as an immediate resistance, above which the pair is likely to head back towards retesting the 110.70-75 supply zone before eventually darting towards reclaiming the 111.00 handle.
On the flip side, the 109.85-80 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to slide back towards 109.55-50 intermediate support en-route the 109.20 level and the 109.00 handle.
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