USD/JPY in search of a firm near-term direction, stuck in a range above mid-107.00s

The USD/JPY pair extended its sideways consolidative price action and remained confined in a narrow trading band, just above mid-107.00s.

The pair has been oscillating in 70-80 pips over the past one week or so and struggled for a firm near-term direction as investors seemed to wait for a fresh catalyst before placing any aggressive bets.

The pair did get a goodish intraday lift on Thursday after reports indicated that the Bank of Japan (BoJ) was planning to remove the bond-buying limit, albeit failed to capitalize on the move beyond the 108.00 mark.

Meanwhile, the latest optimism over additional $484 billion US economic package turned out to be short-lived amid indications that Gilead Sciences' antiviral drug remdesivier failed to help severely ill COVID-19 patients in its first clinical trial.

This was evident from a weaker trading sentiment surrounding the global equity markets, which underpinned the Japanese yen's perceived safe-haven demand and turned out to be one of the key factors capping the major.

On the other hand, uncertainty over the severity of the economic damage from the coronavirus pandemic continued benefitting the US dollar's status as the global reserve currency and helped limit any meaningful downside for the pair.

Hence, it will be prudent to wait for a convincing break through the mentioned trading range to confirm the pair's near-term trajectory. A  sustained strength above the 108.00-10 region might be seen as a fresh trigger for bullish traders.

Moving ahead, market participants now look forward to the release of the US Durable Goods Orders, which might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North-American session.

Technical levels to watch