- A modest USD uptick assisted USD/JPY to regain positive traction on Wednesday.
- A softer risk tone benefitted the safe-have JPY and capped the upside for the pair.
- Traders eye US Durable Goods Orders for some impetus ahead of FOMC decision.
The USD/JPY pair held on to its modest daily gains through the early European session, albeit lacked any strong follow-through buying. The pair remained within the previous day's range and was last seen trading around the 103.65-70 region.
The US dollar inched higher during the first half of the trading action on Wednesday, which, in turn, was seen as one of the key factors that provided a modest lift to the USD/JPY pair. That said, the prevalent cautious mood around the equity markets underpinned the safe-haven Japanese yen and capped any meaningful upside.
Investors remain worried about the potential economic fallout from the continuous surge in new coronavirus cases and the imposition of fresh restrictions. Apart from this, doubts about the timing and size of a new US economic stimulus package, escalating US-China tensions in the South China Sea further dampened the market mood.
Meanwhile, the lower risk appetite was reinforced by declining US Treasury bond yields. This further held the USD bulls from placing aggressive bets and collaborated to keep a lid on any strong gains for the USD/JPY pair. Investors also seemed reluctant and preferred to stay on the sidelines ahead of the FOMC decision later this Wednesday.
Heading into the key event risk, the release of the US Durable Goods Orders data might influence the USD price dynamics and provide some impetus. Traders might further take cues from the broader market risk sentiment, developments surrounding the coronavirus saga and US stimulus headlines to grab some short-term opportunities.
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 holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 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.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
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.