USD / JPY cuts intraday losses, finds some support near 110.00

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  • USD / JPY saw some selling on Thursday and broke two consecutive days of the winning streak.
  • A subsequent pullback in the USD from multi-month highs sparked some selling around the pair.
  • A modest pickup in demand for the safe-haven JPY contributed to the slide amid falling US bond yields.

The pair USD/JPY it updated the daily lows in the last hour, although it managed to defend the 110.00 psychological level and quickly rallied a few pips thereafter.

The pair halted this week’s solid rebound from near 109.00, or near month-long lows, and was down on Thursday, breaking two consecutive days of the winning streak. After a brief consolidation throughout the middle of the European session, the US dollar witnessed some selling and was seen as a key factor putting 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 hit by a strong rebound in demand for European currencies. The selling bias accelerated after US macroeconomic data showed jobless claims unexpectedly rose to 419,000 during the week ending July 16 from the prior week’s revised upward reading of 368,000.

Bearish traders followed signs of a modest pullback in US Treasury yields and a softer opening in US equity markets. This, along with concerns about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus, sustained the Japanese yen as a safe haven and contributed to the intraday decline of the USD / JPY pair.

Despite the negatives, the bulls, so far, have managed to defend 110.00. This coincides with the 200 hourly SMA, which should now act as a key point for intraday traders. Sustained weakness below could spark some technical selling and drag USD / JPY towards horizontal support at 109.70-65 en route 100-day SMA around 109.50.

Technical levels

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