USD/JPY stays indecisive below 111 as stocks and yields move in different directions
- Wall Street turns positive on the day after starting in the red.
- 10-year US T-bond yield drops on Tuesday.
- US Dollar Index slumps to two-week lows near 96.50.
The USD/JPY pair continues to fluctuate in a relatively tight range below the 111 mark on Tuesday and is struggling to make a decisive move in either direction. As of writing, the pair was virtually unchanged on a daily basis at 110.60.
The greenback on Tuesday came under a renewed pressure in the NA session as the T-bond yields extended their slide with the 10-year reference touching its lowest level in a week amid a more than 1% daily drop. The US Dollar Index, which tried to regain the 97 mark earlier today, continued to push lower in the last couple of hours and slumped to a 12-day low of 96.45.
Despite the broad-based USD weakness, however, the pair didn't have a difficult time limiting its losses as the rebound witnessed in Wall Street weighs on the demand for traditional safe-haven currencies. After starting the day in the negative territory, major equity indexes in the U.S. turned positive on the back of the strong performance of the consumer staples sector, which was supported by the strong sales figures from the biggest U.S. retailer, Walmart.
Trade balance data from Japan will be coming up next in the Asian session on Wednesday. Later in the day, the FOMC is scheduled to publish the minutes of its last meeting.
Technical levels to consider
The pair could face the initial support at 110 (psychological level/20-DMA) ahead of 109.50 (50-DMA) and 108.80 (Jan. 30 low). On the upside, resistances are located at 110.80 (daily high), 111.30 (100-DMA) and 112 (psychological level).