- USD/JPY consolidated the previous day’s sharp intraday slide from the 107.70-75 supply zone.
- The prevalent selling bias around the USD failed to impress bulls or lend any support to the pair.
- Hopes of a swift economic recovery undermined the safe-haven JPY and helped limit any losses.
The USD/JPY pair lacked any firm directional bias and remained confined in a range, above the 107.00 mark through the Asian session on Thursday.
Following the previous day's intraday pullback of around 50 pips from the 107.70-75 supply zone, the pair fell to 1-1/2-week lows on Thursday. However, a combination of diverging forces failed to provide any meaningful impetus to the USD/JPY pair and led to a subdued/range-bound price action on Thursday.
The US dollar remained depressed near multi-week lows and was seen as one of the key factors that failed to impress bulls traders or extend any meaningful support to the USD/JPY pair. However, hopes of a swift economic recovery undermined the safe-haven Japanese yen and helped limit the downside.
Despite concerns about the ever-increasing coronavirus cases across the world, the incoming positive economic data has been fueling expectations for a sharp V-shaped global economic recovery. This, in turn, remained supportive of the upbeat global risk sentiment and the recent rally in the equity markets.
It will now be interesting to see if the USD/JPY pair is able to attract any buying interest at lower levels or weakens further below the 107.00 mark to confirm a near-term bearish break. The downward trajectory might then get extended further towards the next major support near the 106.50-45 region.
Market participants now look forward to the US economic docket, highlighting the release of Initial Weekly Jobless Claims. The data might influence the USD price dynamics, which coupled with the broader market risk sentiment might produce some meaningful trading opportunities on Thursday.
Technical levels to watch
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