- USD/JPY lacked any firm directional bias and remained confined in a range on Thursday.
- A subdued USD price action failed to impress bulls or provide any meaningful impetus.
- The upbeat market mood undermined the safe-haven JPY and helped limit the downside.
The USD/JPY pair remained on the defensive through the early North American session and remained well within the striking distance of two-week lows set earlier this Thursday.
The pair lacked any firm directional bias and was seen consolidating the previous day’s intraday pullback from the 107.70-75 resistance zone. The US dollar struggled to gain any meaningful traction and remained depressed near multi-week lows. This, in turn, was seen as one of the key factors capping the upside for the USD/JPY pair.
Meanwhile, hopes of a sharp V-shaped global economic recovery overshadowed growing worries about the ever-increasing coronavirus cases. The optimism was evident from a positive mood around the equity markets, which undermined demand for the perceived safe-haven Japanese yen and extended some support to the USD/JPY pair, at least for now.
On the economic data front, the US Initial Weekly Jobless Claims came in at 1.314 million for the week that ended July 3, slightly better than 1.375 million anticipated. This was the lowest reading since mid-March and offered further evidence that the worse of the coronavirus pandemic was probably over, albeit did little to impress the USD bulls.
With Thursday’s key US macro data out of the way, it will now be interesting to see if the USD/JPY pair is able to gain any meaningful traction or continues with its subdued/range-bound trading action. However, the prevalent upbeat market mood should help limit any deeper losses and possibly assist the pair to defend the 107.00 mark.
Technical levels to watch
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