USD/JPY Subdued Below 50-DMA Ahead of US GDP Release
The USD/JPY pair eased off from the vicinity of 110.00 handle and has now dipped back below 50-day SMA to currently trade near 109.65, few pips off day's through level of 109.55.
The pair remained weak on Thursday, as durable good orders portrayed a mixed outlook for the US economy.
The pair continues to face difficulty in sustaining its strength above 110.00 handle and offers at higher levels has repeatedly dragged the pair below 50-day SMA. Stability in global equities and risk-on rally in the past few trading sessions, has failed to extend support to the pair.
The reversal from higher levels, however, is being bought into below 109.50 level, near 109.20-15 area, clearly pointing to the near-term directionless, range-bound trading action as investors now seems to await for the next big trigger, US jobs data for May slated for release next week.
In the meantime, market participants will also take some trading cues from today's revision of the US GDP growth for the first quarter of 2016.
Technical levels to watch
A break below the near-term trading range support near 109.20-15 area and a subsequent break through 109.00 handle is likely to accelerate the fall immediately towards 108.50-40 strong horizontal support. Further, a decisive break below 108.50-40 support might turn the pair vulnerable to extend its downward trajectory towards retesting 107.25-107.00 support area in the near-term.
Meanwhile on the upside, 50-day SMA, currently near 109.80-85 region, remains key resistance to conquer, above which the pair is likely to make a fresh attempt to extend its up-move beyond 110.00 handle to test 3-week highs resistance near 110.55-60 area. A decisive strength above this key resistance now seems to trigger a fresh leg of appreciating move for the pair, towards testing its next major resistance near 111.25-30 area in the near-term.