- USD/JPY was seen oscillating in a range and consolidated its recent fall to over two-week lows.
- Investors seemed reluctant to place any aggressive bets ahead of the key central bank events.
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses, below mid-105.00s through the first half of the trading action on Wednesday.
The pair was seen consolidating its recent sharp fall to over two-week lows as investors now seemed reluctant to place any aggressive bets ahead of the key central bank events. The downside remains cushioned amid the latest optimism over a potential vaccine for the highly contagious coronavirus disease, which remained supportive of the upbeat market mood and undermined the safe-haven Japanese yen.
On the other hand, the US dollar bulls remained on the defensive and failed to provide any meaningful impetus to the USD/JPY pair. Wednesday’s key focus will remain on the highly anticipated FOMC monetary policy decision, due to be announced later during the US trading session. The US central bank is expected to maintain its stance and reiterate tolerance for above-target inflation for some time to support the economy.
Meanwhile, the Bank of Japan is also scheduled to announce its policy decision on Thursday, which will further play a key role in determining the USD/JPY pair’s next leg of a directional move. In the meantime, Wednesday’s release of the US Monthly Retail Sales figures will influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session.
Technical levels to watch
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