- USD/JPY regains traction on Thursday amid US-China trade deal optimism.
- A modest pickup in the US bond yields remained supportive of the uptick.
- The upside seems limited as traders eye US retail sales for a fresh impetus.
The USD/JPY pair edged higher through the early European session on Thursday, with bulls looking to extend the momentum further beyond the key 110.00 psychological mark.
The anti-risk Japanese yen remained on the defensive against its American counterpart amid the latest optimism over the conclusion of the long-awaited phase one trade deal between the world's two largest economies.
USD/JPY well supported by trade optimism
This coupled with some positive comments by the US Vice President Mike Pence, saying that Phase 2 discussions had already begun as negotiators work to resolve differences, further helped boost investors' appetite for riskier assets.
The risk-on flow was further reinforced by a modest pickup in the US Treasury bond yields, which turned out to be one of the key factors that underpinned the US dollar demand and remained supportive of the pair's mildly positive tone.
The tensions, however, remained as the US decided to keep in place levies on some $360 billion of Chinese goods, which might hold investors from placing any aggressive bullish bets and eventually keep a lid on any runaway rally for the major.
Hence, it remains to be seen if the pair is able to capitalize on the move or continues with its struggle to sustain above the 110.00 handle, making it prudent to wait for some strong follow-through buying before positioning for any further appreciation.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of monthly retail sales data for December, in order to grab some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.