USD/JPY side-lined below 109.00 ahead of FOMC decision
|- USD/JPY undermined by US-China trade deal jitters-led risk aversion.
- All eyes on the US ADP jobs data and FOMC rate decision for fresh direction.
The USD/JPY pair is seen in a phase of consolidation in early Europe, having failed to regain the 109 handle on several occasions in the Asian trades this Wednesday.
Fed rate decision in focus
The spot sticks to its recent trading range below the 109 handle, as the tepid risk sentiment, in light of a potential delay in the signing of the US-China trade deal, continues to favor the safe-haven Yen.
A US administration official said on Tuesday, an interim US-China trade agreement might not be completed in time for signing in Chile next month as expected. This spooked the markets and sent the Wall Street stocks stumbling, with the Asian equities tracking its US peers lower. The Japanese benchmark, the Nikkei 225 index, closed 0.60% lower.
Moreover, the pair’s upside remains capped amid negative tone seen in the US Treasury yields and US dollar across the board in the run-up to the expected Federal Reserve (Fed) 25-bps rate cut due later today at 1800 GMT.
However, the bears remain cautious, as the US dollar could likely see rebound versus its main rivals on the Fed announcements, as a rate cut is widely priced-in by the markets and hence, “buy the fact” trading cannot be ruled out.
Ahead of the FOMC decision, the major also awaits the US ADP Employment Change data for some fresh trading incentives, as trade and political headlines continue to dominate.
USD/JPY Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.