USD/JPY turns flat as risk-aversion makes a comeback

A fresh wave of risk-aversion seems to have gripped the markets, with the USD/JPY pair reversing majority of its early recovery gains to 101.00 handle and turn flat.

Currently trading nearly unchanged from yesterday's closing around 100.40 level, the pair faced rejection at 101.00 handle and could now be headed back to a multi-week lows touched in the aftermath of BOJ and FOMC monetary policy decision as renewed weakness in crude oil prices seem to offset US presidential debate-led risk-on relief rally.

Moreover, a sharp reversal in European equity markets also seems to contribute towards boosting the safe-haven demand of the Japanese Yen and exerting fresh selling pressure around the major, which has been struggling to register any meaningful recovery. 

Focus now shifts to the release of the Conference Board's Consumer Confidence index for the month of September, later during US trading session, which might assist traders to grab short-term trading opportunities. 

Technical outlook

A team of analysts at AceTrader notes, "above resistance at 101.24 is needed to add credence to this view and yield stronger retracement of medium-term decline towards 101.58/60 before prospect of another retreat."

"On the downside, only below 100.09 would revive bearishness for weakness towards 99.70/80. However, near term loss of momentum would keep price above key daily support at 99.54 and yield correction."