USD/JPY retreats from near 2-week highs, 110.00 mark at risk

13 Sep 2017

The USD/JPY pair reversed early uptick to near two-week high level of 110.29 and drifted into negative territory, snapping two-consecutive days of winning streak.

N. Korea's latest threat to accelerate its plans to acquire a nuclear weapon, following new sanctions imposed by the UN, seems to have prompted some profit taking, especially after the pair's recent upsurge of nearly 300-pips from near 10-month lows touched on last Friday. 

   •  North Korea vows to accelerate nuclear push after UN sanctions - Bloomberg

The pull-back, however, had been limited amid a mildly weaker tone surrounding the US Dollar. A modest retracement in the US Treasury bond yields did little to boost the greenback and helped limit any immediate sharp slide, at least for the time being.

Later during the NA session, the latest US inflation figures would now be looked upon for clues over possibilities and timing of the next Fed rate hike move, which would eventually help investors determine the pair's near-term trajectory.

In the meantime, broader market risk sentiment and the US bond yield dynamics would continue to act as key determinants of the pair's movement through Asian/European trading session.

Technical levels to watch

Sustained weakness below the 110.00 handle could get extended towards 109.70 intermediate support en-route mid-109.00s. On the upside, momentum above 110.25-30 area has the potential to lift the pair beyond 110.45 resistance towards its next major hurdle near the 110.70-75 region.

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