USD/JPY flirting with daily lows, well below mid-107.00s
- USD/JPY edged lower on Tuesday and extended the overnight rejection slide from the 108.00 mark.
- Reviving safe-haven demand underpinned the JPY and exerted some downward pressure on the pair.
- Some follow-through buying around the USD might help limit deeper losses amid coronavirus crisis.
The USD/JPY pair traded with a mild negative bias through the early European session and is currently placed near the lower end of its daily trading range, around the 107.30 region.
Having repeatedly failed to find acceptance/build on its momentum beyond the 108.00 round-figure mark, the pair came under some selling pressure on Tuesday and was being weighed down by reviving safe-haven demand for the Japanese yen.
Investors remain concerned about the economic fallout from the coronavirus pandemic and the already weaker sentiment deteriorated further in the wake of an unprecedented fall in crude oil prices on the first day of the current trading week.
The combination of factors dampened investors' appetite for riskier assets and the same was evident from a weaker tone around the global equity markets, which underpinned demand for traditional safe-haven currencies, including the Japanese yen.
The risk-off mood was further reinforced by a fresh leg down in the US Treasury bond yields, which contributed to the pair's offered tone, albeit some follow-through US dollar buying interest seemed to help limit further downside, at least for now.
Tuesday's US economic docket highlights the release of Existing Home Sales data, though the key focus remains on developments surrounding the coronavirus saga. This coupled with the broader market risk sentiment and the USD price dynamics might produce some meaningful trading opportunities.
Technical levels to watch