“¢ A modest USD uptick fails to provide any bullish impetus.
“¢ JPY weighed down by risk-on mood and helps limit downside.
“¢ Investors seemed to await the release of US GDP print.
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Tuesday.
The pair remained confined in a narrow trading range, above the 111.00 handle, with a combination of diverging forces failing to provide any fresh impetus. A modest US Dollar uptick, coupled with a positive tone around equity markets, which tends to undermine the Japanese Yen’s safe-haven demand, extended some support.
The positive factors, to some extent, were largely offset by concerns over the US-China trade tensions. Adding to this, a weaker tone around the US Treasury bond yields further collaborated towards keeping a lid on any meaningful up-move for the major.
Meanwhile, the pair had a rather muted reaction to the BoJ board member Suzuki‘s comments, saying that factors that slowed inflation are likely to fade away and the central bank risks falling behind the curve if accumulated side effects of monetary policy materialize.
Market participants also seemed to refrain from placing any aggressive bets ahead of today’s key release of the prelim US Q2 GDP growth figures, due later during the early North-American session.
Technical outlook
According to Omkar Godbole, Analyst and Editor at FXStreet, “the pair could attack and possibly break above the July high of 113.18 if Friday’s close is above 111.49.”
“On the downside, acceptance below the previous week’s low of 109.77 would add credence to the H&S breakdown on the yield differential and could yield a deeper pullback to 107.89 (61.8% Fib R of 104.57/113.18),” he added further.
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