- Wall Street posts gains ahead of Independence Day holiday.
- US Dollar Index stays in upper half of its weekly range.
- ADP private sector employment growth rebounds in June, misses expectations.
After testing mid-107s earlier in the day, the USD/JPY pair retraced its daily fall and turned flat on the day near 107.90. As of writing, the pair was trading at 107.82.
The sharp fall witnessed in the US Treasury bond yields on Tuesday and Wednesday weighed on the pair by boosting the demand for traditional safe havens such as the JPY. The 10-year reference lost more than 4% in the last two days and touched its lowest level since November 2016.
However, major equity indexes in the U.S. started the day in the positive territory and continued to edge higher in the first half of the American session, pointing out to improved risk sentiment, which helps the pair recover its losses. At the moment, the S&P 500 and the Nasdaq Composite are both up 0.7% on the day.
Earlier today, the data published by the Automatic Data Processing showed that private sector employment in the U.S. increased by 102,000 following May’s dismal 41,000 reading but fell short of the market expectation of 140,000. Furthermore, the IHS Markit’s Services PMI rose to 51.5 in June from 50.9 in May but the ISM’s Non-Manufacturing PMI eased to 55.1 from 56.9. Following the mixed macroeconomic data releases, the US Dollar Index inched higher and was last seen posting small gains at 96.80.
On Thursday, the U.S. will be on holiday due to the Independence Day and the market action is likely to remain subdued.
Technical levels to watch for
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