USD/JPY witnesses pullback to 111.80 as Tokyo opens

Traders struggled to choose between the two safe-havens during Tuesday’s risk-off.
Light economic calendar keeps emphasizing political plays while looking for fresh direction.

Anil Panchal FXStreet

The USD/JPY pair trades little changed to 111.80 as Tokyo opens on Wednesday. The pair failed to justify the JPY’s safe-haven demand on Tuesday as the US Dollar (USD) was on the rise across the board.

The quote remained mostly unchanged on Tuesday as traders struggled to justify their preference between the US Dollar (USD) and the Japanese Yen (JPY) during risk-off sentiment.

The US 10-year treasury yield, mostly known as global risk barometer, slipped 2 basis points to 2.57% on Tuesday but remained unchanged at the start of Wednesday.

Global equities also rose on the back of welcome earning reports from Twitter and Coca Cola while upbeat new home sales from the US was also a reason to help the USD remain firm.

Looking forward, Japan’s leading economic index for February will be released at 05:00 AM and is expected to remain unchanged at 97.4.

Other than Japan data, we have little details on the economic calendar and hence political events surrounding the US-China trade talks, Brexit and geopolitical plays concerning North Korea, Libya and Syria are likely to entertain traders.

It should also be noted that investors are still nervous ahead of Friday’s US GDP data and the US earnings season is still on.

USD/JPY Technical Analysis

While 200-day simple moving average (SMA) level of 111.55 restricts the pair’s near-term declines, 112.15/20 is likely important resistance on the upside. Should prices rally beyond 112.20, 112.70, and 113.00 could flash on buyers’ radar whereas 50-day SMA level of 111.20 and 110.80 might entertain sellers during the quote’s declines under 111.55.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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