- USD/JPY continued with its struggle for a firm near-term direction.
- A subdued USD demand kept a lid on any meaningful positive move.
- The risk-on mood seemed to help limit the downside for the major.
The USD/JPY pair extended its sideways consolidative price action and remained confined in a range below the 108.00 round-figure mark.
A combination of diverging factors failed to provide any meaningful impetus, or assist the pair to break through a narrow trading band held since the beginning of this week. Investors now seemed to wait for a fresh catalyst before positioning for the pair’s next leg of a directional move.
The latest optimism over the passage of another $484 billion US economic package by the US Senate was further fueled by some follow-through recovery in crude oil prices. This led to some US dollar weakness and was seen as one of the key factors capping the upside for the major.
However, a further improvement in the global risk sentiment undermined the Japanese yen’s safe-haven demand and helped limit the downside for the major. The risk-on mood was reinforced by a modest uptick in the US Treasury bond yields, which extended some support to the greenback.
Moving ahead, market participants now look forward to the US economic docket – highlighting the release of flash Manufacturing PMI and Initial Weekly Jobless Claims. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the day.
Technical levels to watch
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