USD/JPY moves sideways near 112 as investors eye Wall Street opening bell

  • Upbeat data from China boost the risk appetite in the Asian session.
  • S&P 500 Futures up 0.2% on the day.
  • US Dollar Index stays in daily range below 97 ahead of trade balance data.

The safe-haven JPY struggled to find demand in the Asian session after the upbeat data from China allowed risk-on flows to dominate the market action. Following an upsurge to fresh 2019 high at 112.17, however, the USD/JPY failed to preserve its momentum and erased its gains to turn flat on the day near the 112 handle.

Retail sales in China increased by 8.7% on a yearly basis in March following February's 8.2% reading and surpassed the market expectation of 8.4%. Furthermore, the annual GDP growth in Q1 stayed unchanged at 6.4% vs analysts' estimate of 6.3%.

Despite the improved market sentiment, however, the subdued trading action in the FX space didn't allow the pair to continue to push higher. Today's noteworthy Q1 earnings reports from Morgan Stanley and PepsiCo both came in stronger than expected, which could help Wall Street to inch higher toward all-time highs and cause the pair to gain traction. At the moment, the S&P 500 Futures is up 0.2% on the day.

Meanwhile, the US Dollar Index is moving sideways below the 97 mark ahead of the trade balance data from the U.S., forcing the pair to extend its consolidation.

Technical levels to consider

The initial resistance for the pair could be seen at 112.20 (daily high/2019 high) ahead of 112.60 (Dec. 20, 2018, high) and 113.40 (Dec. 12, 2018, high). On the downside, supports are located at 111.90 (daily low), 111.50 (200-DMA) and 111.20 (50-DMA).

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