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USD/JPY holds weaker below 109.00 mark ahead of Powell’s speech

5/8/2018, 3:08:54 PMMarket Analysis
USD/JPY holds weaker below 109.00 mark ahead of Powell’s speech

The USD/JPY pair traded with a mild negative bias on Tuesday and is currently placed near the lower end of its Asian session trading range, just below the 109.00 handle.

Following last week's rejection slide from the key 110.00 psychological mark, the pair has been finding decent buying interest at lower levels and was being supported by resurgent US Dollar demand. 

With USD entering a bullish consolidation phase near YTD tops, bulls now seemed struggling to sustain/build on the momentum back above the 109.00 handle. Moreover, the US-Iran dispute on the nuclear deal was seen lending some support to the Japanese Yen's safe-haven appeal and further collaborated to the pair's mildly softer tone on Tuesday.

Hence, today's key focus will be on the US President Donald Trump's decision on the Iran deal, due to be announced later during the NY trading session. Ahead of the big announcement, a scheduled speech by the Fed Chair Jerome Powell, due in a short while from now, might also influence the USD price dynamics and provide some short-term trading impetus. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The pair could drop below the 100-day MA and extend losses towards the 107.00 neighborhood in the next couple of days.”

“The primary trend remains bullish as the 5-week MA and the 10-week MA is trending north in favor of the bulls. On the higher side, only a close above 110.04 would revive the bullish outlook,” he further added.