USD/JPY holds weaker below 106.00 handle, US GDP in focus
- US-China trade uncertainties continue to benefit JPY’s safe-haven status.
- The recent US yield curve inversion kept the USD bulls on the defensive.
- Investors now look forward to revised US Q2 GDP print for a fresh impetus.
The USD/JPY pair came under some renewed selling pressure on Thursday and eroded a part of the previous session's positive move, back closer to weekly tops.
The pair continued with its struggle to capitalize on this week's goodish rebound from multi-year lows and gain any strong follow-through traction beyond 200-hour SMA resistance near the 106.20-25 region.
A combination of factors benefitted JPY
As investors turned bleak on the prospect of a trade-war breakthrough any time soon, concerns over the global economic growth continued benefitting the Japanese Yen's safe-haven status and capped the major.
Market worries were evident from the prevalent cautious mood around equity markets, which coupled with the inversion of the US bond yield curve, kept the US Dollar bulls on the defensive and exerted some pressure.
The Japanese Yen was further supported by the Bank of Japan (BoJ) board member Suzuki's comments, saying that the economy not showing signs of recession and that they do not need to ease further now.
Meanwhile, the downside seemed limited, at least for the time being, as investors now seemed to refrain from placing any aggressive bets ahead of Thursday's important release of revised US Q2 GDP growth figures.
Hence, it will be prudent to wait for a strong follow-through momentum in either direction before positioning for the pair's near-term trajectory amid the recent escalation in trade tensions between the world's two largest economies.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
