USD/JPY goes into consolidation below 110.50

Following a slide to 110.20 area during the European trading hours, the USD/JPY staged a small rebound and started to move sideways as the trading volume continued to thin out ahead of New Year break As of writing, the pair was trading at 110.37, losing 0.56% on a daily basis.

Earlier today, the data from the U.S. showed that pending home sales declined by 0.7% on a monthly basis in November to meet analysts' estimate. Additionally, the ISM-Chicago's PMI eased to 65.4 in December from 66.4 in November but surpassed the market expectation of 62. Commenting on the data, "The MNI Chicago Business Barometer saw 2018 out in good health, assisted by a firm uptick in Production, cementing the best calendar quarter outturn in a year,” said Jai Lakhani, Economist at MNI Indicators.

The US Dollar Index, which dropped to a weekly low of 96.19 today, retraced a small part of its daily losses in the second half of the day and was last seen at 96.40, where it was down 0.17% on a daily basis. Despite that recovery, however, the pair struggled to gain traction as major equity indexes in the U.S. turned negative following a mixed start to show a deteriorating appetite for risky assets. With today's drop, the pair remains on track to close the second week in a row with losses. 

Technical levels to consider