USD/JPY remains directionless above mid-108s on Monday
|- Stock markets in the US post small gains in the early trade on Monday.
- 10-year US Treasury bond yield stays flat on the day ahead of Fed meeting.
- US Dollar Index stays in the negative territory after disappointing data.
The USD/JPY pair is struggling to make a decisive move in either direction on Monday as the slightly upbeat market sentiment doesn't allow the safe-haven JPY to gather strength. As of writing, the pair was up 0.12% on the day at 108.68.
Ahead of this week's crucial FOMC meeting, major equity indexes in the U.S. are rising modestly in the early trade boosted by strong gains seen in the technology shares while the 10-year Treasury bond yield, which closed the previous week with small losses, stays flat to reaffirm the view that investors are not looking to flee to safer assets.
Previewing the Fed event, "Market anticipation is high that the Fed will signal a pending rate cut this week, perhaps by dropping "patient' from the FOMC statement, even if there is little expectation for a reduction. Will the Fed give up its hard-won 2.5% when little economic warrants it?" questioned FXStreet senior analyst Joseph Trevisani.
On the other hand, pressured by the disappointing Empire State Manufacturing Survey published by the Federal Reserve Bank of New York, the US Dollar Index stays below the 97.50 mark today, not allowing the pair to gain traction. The headline Manufacturing Index of the NY Fed's survey plummeted to -8.6 in June from 17.8 in May and missed the market expectation of 10. Other data from the U.S. revealed that the NAHB Housing Market Index came in at 64 to fall short of analysts' estimate of 67.
Technical levels to watch for
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