USD/JPY in search of a firm direction, FOMC minutes awaited
| • Reviving safe-haven appeal does little to assist build on overnight goodish up-move.
• Resurgent USD demand/positive US bond yields helped limit any immediate downside.
• Investors’ focus remains glued to the latest FOMC monetary policy meeting minutes.
The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses, within a narrow trading range through the mid-European session.
The pair struggled to build on overnight goodish rebound from near one-month lows, with a combination of diverging forces failing to provide any fresh impetus and leading to a subdued/range-bound price action on Wednesday.
A slight deterioration in investors' risk-appetite, as depicted by a mildly negative tone around European equity markets, was seen underpinning the Japanese Yen's safe-haven status and was seen as one of the key factors capping gains.
The pair, however, has managed to hold comfortably above the 112.00 handle and was supported by some renewed US Dollar buying interest. This coupled with a modest uptick in the US Treasury bond yields further collaborated towards limiting any immediate sharp downslide.
Moreover, investors also seemed reluctant to place any aggressive bets ahead of today's key event risk - the latest FOMC meeting minutes, which might provide clues over the central bank's rate hike path beyond 2018 and eventually provide a fresh directional impetus.
In the meantime, the US economic docket, featuring the release of housing market data - building permits and housing starts, will be looked upon to upon to grab some short-term trading opportunities during the early North-American session.
Technical levels to watch
The 112.40-50 region might continue to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 113.00 handle with some intermediate resistance near the 112.70-75 area.
On the flip side, any meaningful retracement is likely to find support near the 112.00 handle, which if broken is likely to accelerate the slide towards 111.75 level en-route 100-day SMA support near the 111.40-35 region.
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