- The USD/JPY pair struggled to build on the overnight rebound from weekly lows.
- Mixed US-China trade headlines held investors from placing any directional bets.
The USD/JPY pair struggled to gain any meaningful traction and remained confined in a 15 pips narrow trading band, just above mid-108.00s through the early European session on Friday.
The pair failed to capitalize on the previous session’s attempted rebound from one-week lows as investors preferred to stay on the sideline amid mixed trade headlines and no concrete signs of any progress in the US-China trade talks.
Focus remains on trade developments
Reports on Thursday indicated that China extended an invitation to the top US trade negotiators for a new round of face-to-face talks and that the US may delay tariffs on Chinese goods, which are slated to go into effect on December 15.
This came on the back of reports on Wednesday that the “phase one” trade deal between the world’s two largest economies may not be completed this year and left investors guessing, rather held the from placing any fresh directional bets.
Meanwhile, a subdued US dollar demand did little to provide any meaningful impetus, albeit some follow-through pickup in the US Treasury bond yields turned out to be the only factor that helped limit the downside, at least for now.
Hence, it will be prudent to wait for a sustained break through the recent trading range before positioning for the next leg of a directional move amid persistent uncertainty over the future US-China trade relations.
Moving ahead, Friday’s US economic docket, featuring the release of flash Manufacturing PMI and revised UoM Consumer Sentiment Index, will now be looked upon for some short-term trading opportunities.
Technical levels to watch
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