- USD/JPY edged lower on Friday amid some renewed USD selling bias.
- The prevalent cautious mood further benefitted the safe-haven JPY.
- Friday’s US Retail Sales for April eyed for some short-term impetus.
The USD/JPY pair failed to capitalize on the previous day’s goodish intraday bounce of around 60 pips and met with some fresh supply on Friday. The pair was last seen trading near session lows, with bears now awaiting some follow-through weakness below the 107.00 round-figure mark.
The US dollar struggled to extend its recent positive move triggered by the fact that the Fed Chair on Wednesday Jerome Powell rejected the idea of using negative interest rates. The greenback got an additional boost after the US President Donald Trump, in an interview with Fox Business Network on Thursday, advocated a stronger dollar and said that it will help the economy during the recovery post coronavirus crisis.
Meanwhile, USD downtick lacked any obvious fundamental catalyst and could be solely attributed to a mildly weaker tone surrounding the US Treasury bond yields. On the other hand, the safe-haven Japanese yen benefitted from fears about the second wave of coronavirus infections and fading hopes for a quick global economic recovery, which, in turn, exerted some downward pressure on the major.
Despite the pullback, the USD/JPY pair remains well within 70-80 pips trading range between below mid-107.00s held over the past three trading sessions. Hence, it will be prudent to wait for a convincing break in either direction before positioning for the pair’s near-term trajectory.
Moving ahead, market participants now look forward to Friday’s important release of the US monthly Retail Sales figures for April. The data might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch