USD/JPY retreats to 112.70 as greenback loses interest

• US Dollar Index loses momentum before reaching 97.
• CB’s Consumer Confidence Index improves in October.
• Wall Street trades mixed on Tuesday.

After coming within a touching distance of the 113 mark, the USD/JPY lost its traction and erased a small part of its daily gains in the early NA session. As of writing, the pair was trading at 112.72, still up 0.3% on a daily basis.

Earlier today, the broad-based USD strength allowed the pair to build on Monday’s gains. With European currencies struggling to find demand on Tuesday, the greenback gathered strength against its rivals with the US Dollar Index advancing all the way up to 96.98 before reversing its course in the last hours. Although there were no fundamental developments that could have put pressure on the USD, a mixed start on Wall Street helped the JPY recover some of its losses. As of writing, the Dow Jones Industrial Average and the S&P 500 indexes were up 0.7% and 0.445%, respectively, while the Nasdaq Composite was virtually flat on the day.

The monthly report published by the Conference Board today showed that the consumer sentiment in the U.S. continued to improve in October with the Confidence Index rising to 137.9 from 135.3 in September. Commenting on the data, “Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth,” said  Lynn Franco, Senior Director of Economic Indicators at the Conference Board. Following this data, the DXY was able to limit its losses and was last seen up 0.12% on the day at 96.80.

Technical levels to consider

On the downside, supports for the pair could be seen at 112.35 (50-DMA), 111.80 (100-DMA) and 111.10 (Sep. 12 low). Resistances, on the other hand, are located at  113.00  (daily high), 113.30 (Oct. 10 high) and 113.90 (Oct. 8 high).