USD/JPY sticks to modest losses, but holds above mid-110.00s ahead of US data
| • Trump threatens to impose tariffs on European car imports and boosted JPY's safe-haven status.
• The USD builds on FOMC meeting minutes-led goodish up-move and helped limit deeper losses.
The USD/JPY pair maintained its softer tone through the mid-European session, albeit has managed to hold its neck just a few pips above daily lows.
Having failed to make it through the 111.00 handle, the pair witnessed some long-unwinding trade on Thursday in wake of the US President Donald Trump's latest threat to impose tariffs on European car imports.
With investors still waiting for a fresh update on the US-China trade talks, the news helped offset today's dismal Japanese flash manufacturing PMI and underpinned the Japanese Yen's relative safe-haven status.
The downside, however, remained cushioned amid a goodish pickup in the US Dollar demand, supported by the fact that the Federal Reserve policymakers remain divided with regards to future rates policy.
Minutes from the January FOMC meeting surprised market participants and also revived hopes for additional rate hike move(s) in 2019, which eventually turned out to be a key factor providing a minor lift to the greenback.
Moving ahead, traders now look forward to the US economic docket, highlighting the release of durable goods orders and Philly Fed manufacturing index, for some fresh impetus later during the early North-American session.
Technical levels to watch
Immediate support is pegged near the 110.50-40 region, below which the pair is likely to accelerate the slide towards challenging the key 110.00 psychological mark. On the flip side, the 110.80 region, closely followed by the 111.00 handle might continue to act as an immediate resistance, which if cleared might lift the pair further towards 100-day SMA hurdle near the 111.55-60 region.
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