USD/JPY stays flat near 109.80, US stocks open the day in the red

• Trade fears drag stocks lower on Friday.
• 10-year T-bond yield falls for the fourth straight day.
• US Dollar Index stays in daily range near mid-96s.

The USD/JPY pair is fluctuating in a very narrow range for the fourth straight day on Friday and struggles to make a decisive move in either direction. As of writing, the pair was virtually unchanged on the day at 109.80.

Since the start of the week, the JPY has been finding demand and staying resilient against the dollar, which was able to post gains against almost all of its major rivals this week. With the major equity indexes in the U.S. sliding in the early trade amid fears of the U.S. – China trade conflict lasting beyond the March 1 deadline, the JPY kept its composure and didn’t allow the pair to gain traction. Additionally, the negative market sentiment continues to impact the T-bond yields and verify the weak demand for risky assets.

On the other hand, despite retreating from its two-week highs on Friday, the US Dollar Index remains on track to record its highest weekly closing of 2019 near 96.50. With no macroeconomic data releases left in the remainder of the day, the pair is likely to stay in its recent range.

Technical outlook

The RSI indicator on the daily chart continues to move sideways near the 50 mark confirming the neutral near-term outlook for the pair. On the upside, 110 (psychological level) remains as the first critical resistance ahead of 110.50 (Dec. 31, 2018, low) and 111.45/50 (100-DMA/200-DMA). Supports, on the other hand, are located at 109.50 (20-DMA), 109.15 (Jan. 28 low) and 108.50 (Jan. 31 low).