FxWirePro: USD/JPY extends modest gains, risk-off boosts dollar's safe-haven status

USD/JPY chart - Trading View 

USD/JPY was trading 0.16% higher on the day at 109.61 at around 07:20 GMT.

The pair has edged above daily cloud, but outlook still remains bearish, scope for downside resumption.

US dollar found bids across the board as flight to safety amid risk-off market sentiment garnered support.

Ongoing deterioration in risk appetite amid heightened fears that the accelerated spread of the Delta variant will derail the global economic recovery keep investors wary. 

Traders will be watching covid headlines for trading oppurtunities. On the data front, focus shall be on US Housing Starts and Building Permits due later on Tuesday.

Meanwhile, diminishing odds for an imminent Fed action any time soon, might hold the USD bulls from placing aggressive bets and cap gains.

Technical bias is bearish. Price action has slipped below 55-EMA. Momentum indicators are bearish.

Cloud offers strong support. Breach below will open downside. Next major support lies at 108.93 (110-EMA) ahead of 38.2% Fib at 108.19.