USD/JPY consolidates in a range below 107.00 mark
- USD/JPY finds some support near the 106.65 horizontal zone amid receding safe-haven demand.
- The global risk sentiment remained well supported by the optimism over a coronavirus vaccine.
- The USD bulls remained on the defensive amid the impasse over additional stimulus measures.
The USD/JPY pair now seems to have entered a bearish consolidation phase and was seen oscillating in a range, below the 107.00 mark through the Asian session.
The pair once again managed to find some support near the 106.65 horizontal zone amid signs of stability in the equity markets, which undermined the safe-haven Japanese yen. The global risk sentiment remains well supported by the latest optimism over a potential vaccine for the highly contagious coronavirus.
On the other hand, the US dollar struggled to gain any meaningful traction and was being pressured by worries that the second wave of the coronavirus infections could delay the US economic recovery. Adding to this, the impasse over the next round of US economic stimulus measures further kept the USD bulls on the defensive.
It is worth recalling that policymakers have been struggling to reach consensus on a $3 trillion relief bill. The said bill was passed by the Democrat-majority House of Representatives two months ago but has been ignored by the Republican-majority Senate. Hence, the key focus will remain on developments surrounding the US stimulus package.
In the meantime, the broader market risk sentiment might continue to influence the safe-haven JPY. This, along with the USD price dynamics will be looked upon for some short-term trading opportunities. Meanwhile, Wednesday's release of the Existing Home Sales data from the US is unlikely to provide any meaningful impetus and pass largely unnoticed.
Technical levels to watch