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  • 10-year US T-bond yield stays in red on Thursday.
  • European equity indexes post losses.
  • US Dollar Index stays flat on the day near 96.90 ahead of the data.

Since touching its highest level of 2019 at 112.14 earlier this week, the USD/JPY has been fluctuating in a consolidation channel amid a lack of significant catalysts. As of writing, the pair was trading at 111.68, losing 0.07% on a daily basis.

The selling pressure surrounding the major European equity indices suggests that investors are staying away from risk-carrying assets on Thursday. Additionally, the 10-year US T-bond yield is posting losses for the fourth straight day today to confirm the risk-off mood, which helps the JPY find demand as a safe-haven and stay resilient against its rivals. At the moment, Germany’s DAX and the UK’s FTSE are both losing around 0.5% on a daily basis.

On the other hand, ahead of the weekly jobless claims  and fourth quarter unit labour costs data from the U.S., the US Dollar Index is virtually unchanged on the day at 96.90 to allow the pair to stay in its active trading band.

Later in the session, investors will be paying close attention to the ECB’s policy statement as well. A sharp downward revision to growth expectations could trigger flight-to-safety. However, if the ECB adopts a dovish tone and weighs on the EUR/USD pair, we could see the greenback outperform its rivals, making it difficult for the pair to push lower in that scenario.

Key technical levels

The pair could encounter the initial resistance at 112 (psychological level/Mar. 5 high) ahead of 112.60 (Dec. 20, 2018, high) and 113.35 (Dec. 10, 2018, high).  On the other hand, supports are located at 111.50 (200-DMA), 111 (100-DMA) and 110.35 (Feb. 27 low).