USD/JPY steadies near 110 amid a lack of fresh fundamental drivers
- Wall Street trades mixed in the first half of the session.
- The US Dollar Index stays quiet near 94.70.
- BoJ's Kuroda voices his concerns over the trade conflict.
The USD/JPY pair is having a difficult time finding direction on Wednesday as the lack of significant data releases reduces the market volatility. As of writing, the pair was trading at 110.10, gaining a modest 0.05% on the day.
After recording heavy losses on the first two days of the week amid fears over the trade conflict between the United States and China, global equity indexes were able to rebound on Wednesday, suggesting that risk-aversion is losing its dominance over the market action.
Just recently, the UK's FTSE and Germany's DAX indexes closed the day 0.4% and 0.2% higher respectively. Meanwhile, Wall Street started the day little changed and is now painting a mixed picture. At the moment, the Dow Jones Industrial Average is adding 0.15% while the S&P is losing 0.15%.
On the other hand, the US Dollar Index, once again, failed to break above the 95 mark earlier today and has gone into a consolidation phase near 94.70. The only data from the U.S. showed that existing home sales contracted by 0.4% in May.
Meanwhile, speaking at a panel at the ECB's Forum on Central Banking, Haruhiko Kuroda, Governor of the Bank of Japan, said that the indirect impact of tariffs on the Japanese economy could be significant.
Technical outlook
The RSI indicator on the daily chart continues to move sideways near the 50 mark, supporting the view of a short-term neutral outlook for the pair. On the downside, the pair could face the first support at 109.75 (200-DMA/50-DMA), ahead of 109.20 (Jun. 8 low) and 108.70 (Jun. 1 low). Resistances are located at 110.25/2* (daily high/Jun. 19 high), 110.65 (Jun. 18 high) and 111.40 (May 21 high).
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.
