USD/JPY directionless ahead of US GDP

Haresh Menghani FXStreet

The USD/JPY pair seesawed between tepid gains and minor losses but remained confined within a narrow trading range around three month high.

Currently trading near 105.25 region, the pair was seen consolidating its recent gains to the highest level since July 29. Bulls took a breather following yesterday's strong up-move led by continuous rise in US 10-year Treasury bond yields, which reaffirms market expectations of an eventual Fed rate-hike action by the end of this year.

Market players on Friday will remain focused on the advance Q3 GDP print from the US, due later during NA session, which would provide fresh clues over the possibilities of Fed action at its December meeting and trigger the next leg of directional move for the pair. The US economy is expected to have registered a growth of 2.5% annualized rate during the third quarter of 2016, marking its strongest quarterly growth since Q4 2014.

Technical levels to watch

Momentum above session high resistance near 105.40-45 region is likely to get extended towards 105.65 (July 29 high) above which a fresh leg of appreciating move might lift the pair beyond 106.00 handle towards 106.50-55 resistance area (July 27 high). On the downside, support is pegged at session low near 105.00 psychological mark, which if broken is likely to drag the pair towards a previous strong resistance, now turned important support near 104.50-40 area.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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