“¢ A brief pause in the recent USD upsurge does little to build on intraday rebound.
“¢ JPY benefits from reviving safe-haven demand and keeps a lid on additional gains.
“¢ Traders now eyed the final US GDP print in order to grab short-term opportunities.
The USD/JPY pair struggled to build on its intraday rebound but has still managed to hold comfortably above the key 110.00 psychological mark.
The pair once again failed to move past the 110.40-50 supply zone and was further weighed down by a modest US Dollar retracement from 11-month highs. With investors looking past today’s disappointing Japanese retail sales data, the greenback lost its upside momentum, despite an uptick in the US Treasury bond yields, and was seen as one of the key factors that capped any further up-move for the major.
Adding to this, a sea of red across European equity markets, amid persistent global trade tensions, underpinned the Japanese Yen’s safe-haven appeal and further collaborated to the pair’s retracement of around 20-pips from session tops.
Currently hovering around the very important 200-day SMA, traders now look forward to the final print of US Q1 GDP growth figures, which is expected to match preliminary estimates of 2.2% annualized growth, in order to grab some short-term opportunities.
Technical outlook
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “Technical readings in the 4 hours chart indicate an easing upward potential, as the pair is barely holding above horizontal moving averages and a key Fibonacci level, all in the 110.00/15 area, while technical indicators hold within positive territory, but with no directional strength. The Momentum indicator aims modestly higher, but below its previous high, while the RSI turned lower, and nears its mid-line. The pair will gain some further upward traction on an acceleration through 110.45, the immediate resistance, while below 110.00 the risk will lean to the downside for the upcoming sessions.”
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