The U.S. dollar dropped down on Tuesday in Asian and European sessions, while the Japanese yen grew due to increasing tension in the Middle East, attracting safe-haven demand. The USD/JPY pair last traded at 106.93, down 0.3%.
At the starting of the day, it has helped to push Treasury yields down to session lows. These mainly include the 10-year bond yield, which moved under 2% yield, dropping by 1.5 bps on the day. Indeed, investors are switching their investments to risk-free assets such as gold, government bonds, and Japanese yen.
On the flip side, that has given USD/JPY pair a little more of a push lower as the pair drops below the 107.00 handles. Moreover, the safe haven pair continues to move lower beneath 107.00, the lowest level since January’s flash crash.
The USD/JPY chart isn’t suggesting any near term support where the buyer can come in. Anyhow, things can quickly turn back around, despite some negative sentiment now, if the U.S. and China trade talks yield some positive results, perhaps the trade deal.
Daily Support and Resistance
Pivot Point 107.37
At present, the USD/JPY remains mixed beneath the 107.00 level and remains the key gauge of interest in the market, but an indication of easing of tensions could immediately send it through 108.00 and over as the week proceeds. Consider staying bearish below 107.200 to target 106.750 and 106.500.
All the best!