USD/JPY clings to modest gains near session tops, comfortable above 106.00 mark
|- USD/JPY regained some positive traction on Friday and edged closer to weekly tops.
- Improving risk sentiment undermined the safe-haven JPY and remained supportive.
- A weaker tone surrounding the USD might keep a lid on any strong gains for the pair.
The USD/JPY pair edged higher during the early European session and was last seen trading near the top end of its daily trading range, around the 106.25 region.
Following the previous day's two-way/directionless price moves, the pair managed to regain positive traction on the last trading day of the week and has now moved back closer to weekly tops. A strong rebound in the US equity futures undermined the Japanese yen's safe-haven demand and turned out to be one of the key factors that extended some support to the USD/JPY pair.
On the other hand, the US dollar remained depressed amid doubts over the next round of the US fiscal stimulus measures. The US Senate on Thursday rejected a Republican bill that would have provided around $300 billion in new coronavirus aid. Democratic prevented the bill from advancing as they have been pushing for far more funding amid the coronavirus pandemic.
This comes amid some renewed buying around the shared currency, which further contributed to the greenback's mildly softer tone and might keep a lid on any strong gains for the USD/JPY pair. Hence, it will be prudent to wait for some strong follow-through before traders start positioning for any further near-term appreciating move for the major.
Market participants now look forward to the US economic docket, highlighting the release of the latest consumer inflation figures. The data, along with the broader market risk sentiment, should assist traders to grab some meaningful trading opportunities later during the early North American session.
Technical levels to watch
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