USD/JPY flirting with lows, around 110.00 mark ahead of US data
| • Easing USD bearish pressure helps stall the post-FOMC slide.
• Sliding US bond yields/trade tensions likely to cap any strong recovery.
• Traders eye the US retails sales data for some impetus ahead of BoJ on Friday.
The USD/JPY pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading range, around the key 110.00 psychological mark.
The post-FOMC US Dollar selling now seems to have abated a bit, at least for the time being, with a modest recovery in the European equity markets, which tends to dampen the Japanese Yen's safe-haven demand, extending some minor support to the major.
Bears also seemed taking some breather and preferred to wait for today's important release of the US monthly retail sales data, due later during the early North-American session, before initiating fresh positions.
Meanwhile, the ongoing retracement in the US Treasury bond yields, coupled with lingering US-China trade tensions might continue to keep a lid on any meaningful recovery back above the very important 200-day SMA.
Apart from the US macro data, the ECB-led volatility in the FX market would influence the USD price dynamics and eventually help traders grab some short-term opportunities ahead of the BoJ monetary policy update during the Asian session on Friday.
Technical levels to watch
A follow-through selling has the potential to continue dragging the pair towards 109.65 horizontal level en-route 109.20 support and the 109.00 handle. On the flip side, the 110.20 region (200-DMA) seems to hinder any recovery attempts, above which the momentum could get extended back towards the 110.75-80 supply zone.
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