“¢ USD bulls remain on the back-foot at the start of a new trading week.
“¢ JPY remains supported by domestic data/reviving safe-haven demand.
“¢ Investors focus remains glued to Tuesday’s BoJ monetary policy update.
The USD/JPY pair extended its consolidative price action through the mid-European session and oscillated within 15-20 pips narrow range, above the 111.00 handle.
The pair struggled to register any meaningful recovery and remained within striking distance of near three-week lows set last Thursday. A modest US Dollar weakness, led by Friday’s stronger but not very impressive US GDP growth figures, was seen as one of the key factors failing to assist the pair to gain any positive momentum.
Meanwhile, the Japanese Yen remains supported by today’s upbeat Japanese retail sales data, which coupled with the prevalent cautious mood around equity markets, which tends to underpin demand for traditional safe-haven currencies, further collaborated to the pair’s subdued/range-bound action at the start of a new trading week.
Moreover, investors also seemed to refrain from placing any aggressive bets and preferred to wait for the latest BoJ monetary policy update, due to be announced on Tuesday, and before positioning for any near-term directional move.
Today’s relatively thin US economic docket, featuring the release of pending home sales, seems unlikely to provide the required momentum to finally assist the pair to make it through a near one-week-old trading range.
Technical levels to watch
Immediate resistance is pegged near the 111.35 horizontal zone, above which the pair is likely to aim towards reclaiming the 112.00 round figure mark. On the flip side, 110.90-80 zone now seems to act as an immediate support, which if broken might turn the pair vulnerable to slide further towards 110.40 intermediate support en-route the key 110.00 psychological mark.
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