“¢ Softer US consumer inflation figures kept the USD bulls on the back-foot.
“¢ A modest uptick in the US bond yields/risk-on mood helps limit downside.
“¢ Traders eye US monthly retail sales data for some meaningful impetus.
The USD/JPY pair struggled to build on its early uptick beyond the 112.00 handle and consolidated overnight strong gains to 1-1/2 month tops.
A combination of diverging forces failed to provide any meaningful impetus and has led to a subdued/range-bound price action on the last trading day of the week. The US Dollar held on the defensive, especially after Thursday’s softer US consumer inflation figures and was seen as one of the key factors keeping a lid on any meaningful up-move.
Bulls, however, seemed to track a modest uptick in the US Treasury bond yields, while a continuous recovery in risk sentiment, amid diminishing risk of any further escalation in trade tensions, dented the Japanese Yen’s safe-haven status and helped limit any immediate downside.
It would now be interesting to see if the pair is able to regain positive traction or continues with its struggle to sustain above the 112.00 handle as the focus now shifts to the US economic docket, highlighting the release of monthly retail sales data and prelim UoM consumer sentiment index.
Technical levels to watch
Momentum beyond the 112.00 handle is likely to confront some fresh supply near the 112.15 area, above which the pair seems all set to aim towards challenging its next major hurdle near the 112.90-113.00 region.
On the flip side, the 111.70-65 zone now seems to act as an immediate support, which if broken might prompt some additional weakness towards 111.25 horizontal zone en-route the 111.00 handle.
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