USD/JPY retreats to 106.00 as US bonds recover
- USD/JPY moving sideways on Tuesday, still far from weekly lows.
- DXY drops to 6-day lows while yen remains weak amid risk appetite.
- US data: Factory Orders declined 1.4% in January.
USD/JPY tested Asian session highs above 106.40 but failed to break higher and pulled back toward 106.00. It was trading at 106.05, less than 15 pips below yesterday’s close.
The pair continues to move sideways. Earlier today reached 106.45 the highest level since Thursday but then lost strength.
Recent US data showed that Factory Orders contracted more than expected, 1.4% in January, while orders stripping the Transportation sector rose 0.4%. The data had no impact on the US dollar.
The recent retreat of USD/JPY took place amid a recovery in US bonds. US yields are now in negative territory for the day, adding support to the yen. The Japanese currency trimmed losses across the board during the last hours.
Previously the yen tumbled amid risk appetite. The meeting between South Korean officials and Kim Jong Un had a positive impact on financial markets. Also, fewer concerns about the potential “trade war” contribute to the rally in equity prices. But US indexes failed to hold to gains. The Dow Jones was down 0.30% after falling from levels near 25,000 to 24,799.
Technical levels
To the downside, support levels are seen at 105.80 (daily low), 105.40 and 105.20/25 (last week low). On the upside, resistance might lie at 106.45 (daily high), 106.75 (Feb 27 high) and 107.15 (Feb 23 & 26 high).