The USD/JPY pair extended its consolidation phase and remained confined within a narrow trading band around 104.00 handle.
Currently trading with mild negative bias around 103.70-75 region, traders seemed uninspired with mixed Chinese macroeconomic data that showed growth in the world's second largest economy held steady at 6.7% during Q3 of 2016, while industrial production for September dropped to 6.1%.
Also on Tuesday, the pair seesawed between tepid gains / minor losses and struggled for a firm direction. Even the release of US consumer inflation failed to provide any impetus as the near-term trajectory remains solely dependent on investors’ expectations over the next Fed rate-hike action.
Today's US housing market data - building permits and housing starts will be looked upon to grab short-term trading opportunities, while the broader movement would be driven by the prevalent risk sentiment around equity markets that derives the Japanese Yen's safe-haven demand.
Technical levels to watch
A follow through selling pressure below session low support near 103.65, leading to a subsequent drop below 103.50, is likely to accelerate the slide towards 100-day SMA support near 103.15-10 region. Meanwhile on the upside, recovery momentum above 104.00 handle might continue to confront resistance near 104.20 level (yesterday's high) above which the pair is likely to aim towards 104.40-50 strong resistance area.
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