USD/JPY in search of a firm direction, stuck in a range below 111.00 mark

   •  A modest USD weakness fails to assist the pair to build on the overnight bounce.
   •  The ongoing slide in the US bond yields further collaborates towards capping gains.

The USD/JPY pair lacked any firm directional bias and was seen oscillating in a narrow trading band, below the 111.00 handle through the Asian session on Tuesday.

The pair's overnight attempted bounce from multi-week lows lost steam ahead of the 111.00 handle, with receding demand for traditional safe-havens also doing little to attract any fresh buying on Tuesday.

Despite the latest escalation in the US-China trade tensions, the fact that negotiations will continue this week undermined the Japanese Yen's relative safe-haven status and extended some support to the major.

Bearish traders further took cues from the ongoing slide in the US Treasury bond yields, which exerted some downward pressure on the US Dollar and collaborated towards capping any meaningful up-move.

It would now be interesting to see if the pair is able to gain traction or the current subdued/range-bound trading action turns out to be a consolidative phase before the next leg of near-term bearish trajectory.

There isn't any major market-moving economic data due for release on Tuesday and hence, the USD price dynamics/broader market risk sentiment might continue to be key determinants of the pair's momentum.

Technical outlook

As Omkar Godbole, FXStreet's own Analyst and Editor writes: “The pair, therefore, looks set to test support at 109.70 (April 25 low) in the short-term. The bearish outlook would be neutralized if the pair closes above the descending 10-day MA, currently at 111.37. That, however, looks unlikely with signs of risk aversion.”

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

GBP/USD tumbles from the highest since 2018 on the Brexit impasse

The GBP/USD roller coaster continues with a downfall below 1.35 after the pair hit a 31-month high of 1.3539 earlier. Brexit talks have yet to yield an agreement. Negotiations are set to continue through the weekend.


EUR/USD battles 1.2150 after disappointing NFP

EUR/USD is trading off the 32-month highs amid bumps in US stimulus and vaccine distribution. Markets await the all-important US Nonfarm Payrolls missed expectations with 245K jobs gained in November. 


XAU/USD fails to break $1850 and turns to the downside

Gold peaked after the beginning of the American session at $1848/oz reaching the highest level since November 23 and then turned to the downside. It bottomed at $1829 and is it about to end the week hovering around $1830.

Gold news

Dollar downfall explained and what's next for markets

The safe-haven US dollar is hitting multi-month and multi-year lows against its peers while stocks are on fire. What is behind the risk-on rally? Valeria Bednarik, Joseph Trevisani, and Yohay Elam discuss markets' moving parts as 2020 nears its end.

Read more

Extra week of Black Friday!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info