USD/JPY struggles for direction, stuck in a range around 106.00 mark
- USD/JPY remained confined in a range near the 106.00 mark on Thursday.
- A subdued USD demand kept a lid on the early uptick to three-week tops.
- The risk-on mood undermined the safe-haven JPY and helped limit losses.
The USD/JPY pair extended its sideways consolidative price action through the early North American session and remained confined in a narrow trading band near the 106.00 mark.
A combination of diverging factors failed to provide any meaningful impetus, or assist the USD/JPY pair to capitalize on this week's positive move and led to a subdued trading action on Thursday. A softer tone surrounding the US dollar was seen as one of the key factors that kept a lid on the attempted intraday positive move to over three-week tops.
The greenback was being weighed down by the political uncertainties ahead of the US presidential election on November 3. In fact, the US President Donald Trump declined to participate in a virtual debate, originally scheduled for October 15 in Miami. Thursday's disappointing weekly jobless claims also did little to provide any respite to the USD bulls.
The negative factor, to a larger extent, was offset by the prevalent upbeat market mood, which tends to undermine demand for the safe-haven Japanese yen. The global risk sentiment remained well supported after Trump on Wednesday signalled progress in stimulus negotiations and showed a willingness to negotiate piecemeal bills to support the economy.
This, in turn, was seen as one of the key factors lending some support to the USD/JPY pair and helped limit any meaningful slide. Hence, any subsequent dip towards the 105.80-75 resistance breakpoint might be seen as a buying opportunity. That said, bulls might still need to wait for some follow-through buying beyond the 106.10 area before placing fresh bets.
Technical levels to watch