USD/JPY struggles near 2-week lows, below mid-105.00s

• USD/JPY witnessed some heavy pressure for the second consecutive session on Tuesday.
• The downward trajectory was sponsored by sustained USD selling, sliding US bond yields.
• Oversold conditions on hourly charts warrant some caution for intraday bearish traders.

The USD bearish pressure picked up pace during the early North American session and pushed the USD/JPY pair to fresh two-week lows, around the 105.40 region in the last hour.

The pair witnessed some strong follow-through selling for the third consecutive session and extended its retracement slide from the 107.00 region, or three-week tops set last Thursday. The downfall was exclusively sponsored by the heavily offered tone surrounding the US dollar, which was being weighed down by the impasse over the next round of the US fiscal stimulus measures.

Bearish traders further took cues from declining US Treasury bond yields, which undermined the already weaker sentiment surrounding the greenback. Apart from this, escalating US-China tensions drove some haven flows towards the Japanese yen and further collaborated to the USD/JPY pair's steep decline, summing up to around 165 pips over the past three trading sessions.

Meanwhile, indications of a positive opening in the US equity markets failed to impress bullish traders or stall the pair's ongoing slide back closer to monthly lows, set on August 6. Some follow-through selling below the mentioned low, around the 105.30 area, will set the stage for an extension of the USD/JPY pair's short-term bearish trend.

However, oscillators on hourly charts are already flashing oversold conditions and warrant some caution. Investors might also be reluctant to place any aggressive bearish bets ahead of Wednesday's important release of the latest FOMC meeting minutes. This, in turn, supports prospects for some intraday short-covering bounce.

Reprinted from hotforex, the copyright all reserved by the original author.

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