- USD/JPY is currently trading at 112.00, within a range of between 111.97 and 112.06.
- Risk sentiment has eased off a touch despite upbeat Chinese data and steady as she goes U.S. outlook.
USD/JPY was flat overnight around 112.00 as markets consolidated following a brief burst of excitement pitched by tChinesense data dump where GDP beat expectations, but only just and stayed in line with prior.
U.S. stocks were undermined by a poor health care performance which capped the pair in its northerly trajectory:
- The Nasdaq Composite lost 4 points, or less than 0.1%, to end near 7,997.
- The S&P 500 closed with a loss of around 7 points, or 0.2%, near 2,900.
- The Dow Jones Industrial Average (DJIA), was off by a marginal 3 points ending around 26,450.
As for Us data, analysts at Westpac explained:
The Fed’s Beige Book of regional economic conditions was little changed, again characterizing growth as “slight to moderate”. Fed speakers included Bullard, who expected the yield curve to continue to steepen as the economy improves this year and Harker, who also expected sustained growth and sees at most one hike in 2019 and one in 2020. The chances of a Fed rate cut by December, implied by Fed fund futures, remained at 50%.
Meanwhile, the U.S. 10yr treasury yield climbed from 2.58% to 2.61% for another high this month while the 2yr yield ranged between 2.39% and 2.43%, tailing off towards the close.
Valeria Bednarik, The Chief analyst at FXStreet explained that, technically, the pair maintains a neutral-to-bullish stance short term:
“In the 4 hours chart, the pair held around its 20 SMA, although the lack of follow-through has turned the moving average flat, anyway still well above the larger ones. In the mentioned timeframe, the Momentum indicator remains directionless around its 100 level while the RSI hovers around 60. The risk will remain skewed to the upside as long as the price holds above the 111.80 level, the immediate support.”