USD/JPY stays directionless around 109.50, waits for next catalyst

BoJ's Kuroda says uncertainties remain high for global economy.
US Dollar Index clings to modest gains above 97.70.

Eren Sengezer FXStreet

After closing the previous week in the negative territory, the USD/JPY pair staged a modest recovery but struggled to gather momentum amid thin trading volume on Monday. As of writing, the pair was up 0.18% on a daily basis 109.48.

Earlier today, the data published from Japan showed that the Coincident Index and the Leading Economic Index in March retreated from the levels recorded in February. Meanwhile, in his speech delivered at the T20 summit, Bank of Japan Governor Kuroda said that uncertainties for the global economy were still high and added that the they "intensively discuss global imbalances" at the G20 summit.

On the other hand, following its sharp drop witnessed in the second half of the previous week, the US Dollar Index is now posting small recovery gains at 97.75 helping the pair continue to float in the positive territory.

Stock markets and bond markets in the U.S. will be closed due to Memorial Day holiday on Monday and the trading action is likely to stay subdues in the second half of the day. There won't be any macroeconomic data releases from Japan on Tuesday either. The consumer confidence and housing market data from the U.S. tomorrow could be the next catalyst for the pair.

Technical levels to consider

The pair could face the initial support at 109.30 ahead of 109 (May 13 low) and 108.70 (Feb. 1 low). On the upside, resistances are located at 110 (psychological level), 110.35 (May 23 high) and 110.85 (100-DMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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