- USD/JPY slipped lower for a second consecutive day yesterday
JPY was well supported from safe haven flows - Solid US Dollar demand helped keep losses in check as equity markets stabilised
USD/JPY trended southwards for the second day on Wednesday hitting a fresh one-week low, around 105.80-75.
The safe haven JPY received support following a deep sell off in US equity markets;.a key factor exerting pressure.
Technical selling could also be playing a role after yesterday’s decline pulled the pair through a multi-day-old trading range support. Meanwhile several factors provided support.
US equity futures are starting to calm, which, when added to rising US Dollar demand helped limit losses.
Technically speaking, USD/JPY has been oscillating between two converging trend-lines for the past few weeks forming a symmetrical triangle, which points to a lack of direction moving forwards whilst suggesting indecision over the next leg of a directional move.
The economic calendar is light on Wednesday. It could be prudent to wait for some strong follow-through selling before positioning for a deeper sell off.