The USD/JPY pair rose to a daily high at 111.70 following today's macro data from the United States but lost momentum there as the market's focused shifted to the UN Security Council meeting on the situation in North Korea. After a mild pullback, the pair is now trading at 111.45, up 0.15% on the day.
Following his meeting with Chinese Foreign Minister Wang Yi, U.S. Secretary of State Rex Tillerson said that the situation with North Korea has reached a very dangerous level and argued that the threat of a nuclear attack on Japan and South Korea were real.
Earlier in the day, in an exclusive interview with Reuters, U.S. President Trump suggested that although his administration was looking for ways to take control of the situation through economic sanctions, there was a chance that the U.S. could end up having a major conflict with North Korea.
Despite the fluctuation witnessed in the NA session, the USD/JPY pair is still trading in a three-day-old trading range between 111 and 111.80. Today's mixed data helped the greenback retrace some of its losses against its rivals but the US Dollar Index is yet to make a decisive break above the 99 handle. Following the sharp fall after the first round of French election, the Index failed to make a daily close above 99 and is now at 98.88, losing 0.14% on the day.
Technical outlook
The initial hurdle for the pair aligns at 112 (psychological level) ahead of 112.70 (100-DMA) and 113.50 (Mar. 17 high). On the flip side, with a break below 111 (lower band of the recent trading range) the pair could target 110.35 (Apr. 5 low) and 110 (psychological level/200-DMA).
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