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  • US Dollar Index steadies above 97 in American session.
  • Wall Street’s main indexes post modest gains in early trade.
  • Macroeconomic data releases from Japan paint  a mixed picture.  

The USD/JPY pair posted modest losses earlier in the day but struggled to make a decisive move in either direction as the upbeat market mood offset the USD weakness. As of writing, the pair was down 0.1% on the day at 109.53 and was looking to close the second straight week virtually unchanged.

Pair fails to capitalize on USD weakness

With year-end flows impacting the illiquid markets in the holiday-shortened week, the US Dollar Index retraced last week’s rally and dropped to its lowest level in more than a week at 97.10. Nevertheless, the index seems to have gone into a consolidation phase near that level and spent the last hour moving sideways in an extremely tight range.

On the other hand, major European equity indexes remain on track to post modest daily gains and Wall Street opened in the positive territory to reflect an upbeat market mood, which makes it difficult for safe-haven JPY to find demand.

In the meantime, the data from Japan in the early trading hours of the Asian session on Friday revealed that the unemployment rate dropped to 2.2% in November from 2.4%. However, other data showed Retail Trade on a yearly basis in November contracted by 2.1% and Industrial Production declined by 8.1%.  

Technical levels to watch for