- USD/JPY struggled for a firm direction and extended its sideways price action on Thursday.
- The risk-on mood undermined the JPY’s safe-haven demand and extended some support.
- The USD remained on the defensive amid weaker US bond yields and capped the upside.
The USD/JPY pair extended its sideways consolidative price action on Thursday and remained confined in a narrow trading band just below the 109.00 mark.
A combination of diverging forces failed to provide any meaningful impetus to the major and led to a subdued/range-bound trading action for the second straight session on Thursday.
Despite the fact that New York State recorded its highest death toll on Wednesday, investors turned optimistic on forecasts that the coronavirus pandemic may be reaching its peak soon.
This was evident from some follow-through positive move in the global equity markets, which undermined the Japanese yen’s safe-haven demand and extended some support to the pair.
Meanwhile, a subdued US dollar price action, coupled with a weaker tone surrounding the US Treasury bond yields failed to impress bullish traders and kept a lid on any meaningful upside.
Hence, it will be prudent to wait for a sustained break in either direction before traders start positioning for the pair’s next leg of a directional move as the focus now shifts to the US macro data.
Thursday’s US economic docket highlights the release of initial weekly jobless claims. Apart from this, the Fed Chair Jerome Powell’s scheduled speech will be looked upon for some trading opportunities.
Technical levels to watch
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