USD/JPY in search of a firm direction, stuck in a range just above mid-112.00s
|The USD/JPY pair struggled for a firm direction and was seen oscillating within a 20-25 pips narrow trading range just above mid-112.00s.
The Japanese Yen lost some ground after the BoJ Governor Haruhiko Kuroda reiterated the central bank's readiness to maintain QQE with yield curve control until the inflation target of 2% is achieved in a stable manner. The uptick, however, lacked conviction amid a mildly weaker tone surrounding the US Dollar.
On the economic data front, the Japanese current account surplus of ¥2380.4 billion in August, as against ¥2262.4 billion expected, extended some support to the domestic currency and further collaborated towards keeping a lid on any further up-move for the major.
However, the prevalent risk-on environment, as depicted by a positive trading sentiment around Asian equity markets, did little to boost the Japanese Yen's safe-haven appeal and has eventually lead to the pair's range bound/subdued price-action.
Today's US economic docket lacks any major market moving economic releases and hence, the pair seems more likely to hold its 7-day old trading range.
Technical levels to watch
Weakness below mid-112.00s might continue to find support near the 112.30 area, below which the pair is likely to accelerate the fall towards testing the very important 200-day SMA support, currently near the 111.90-85 region.
On the flip side, 112.85-90 zone is likely to act as immediate resistance and is closely followed by the 113.00 handle. Major hurdle remains near the 113.25 region, which if conquered might now pave way for a move towards reclaiming the 114.00 handle.
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