USD/JPY extends sideways grind near mid-108s

For the third straight day this week, the USD/JPY pair is moving sideways in a tight range near the 108.50 mark and is having a difficult time setting its next short-term direction. As of writing, the pair was up 0.08% on the day at 108.56.

Earlier in the week, the upbeat market mood on the back of positive headlines surrounding the United States (US)-China trade conflict and hopes of the UK coming out of the EU with a deal before the deadline made it difficult for the safe-haven JPY to attract investors. On the other hand, the broad-based selling pressure on the Greenback didn't allow the pair to gain traction.

Brexit headlines continue to impact the sentiment

Although the market sentiment seems to have turned sour on revived concerns over a no-deal Brexit, the USD recovery forced the pair to remain directionless. After starting the week on a positive note, the 10-year US Treasury bond yield turned south on Tuesday and extended its slide. At the moment, the yield is down 1.6% on the day.

Reflecting the weak appetite for risky assets, Wall Street's main indexes started the day mixed with the S&P 500 and the Nasdaq Composite both posting modest losses in the early trade while the Dow Jones Industrial Average was virtually flat. 

In the meantime, the US Dollar Index was up 0.05% at 97.55. There won't be any macroeconomic data releases in the remainder of the day and the pair is likely to continue to fluctuate in its weekly range unless a significant change is witnessed in the risk perception.

Technical levels to watch for