USD/JPY holds steady above mid-107.00s
- USD/JPY gains some positive traction for the fifth consecutive session on Tuesday.
- Dismal Japanese data, a modest pickup in the USD demand remained supportive.
- Concerns about rising coronavirus cases kept a lid on any strong gains for the pair.
The USD/JPY pair held on to its modest gains through the early European session, albeit lacked any strong follow-through and remained below three-week tops set on Monday.
The pair prolonged its recent bounce from the 106.00 neighbourhood, or seven-week lows and gained some follow-through traction for the fifth consecutive session on Tuesday. Downbeat Japanese macro data – Industrial Production and unemployment figures for May – weighed on the domestic currency and provided a modest lift to the USD/JPY pair.
Adding to this, stronger than expected Chinese Manufacturing and Services PMI prints for June extended some support to the global risk sentiment and further undermined the safe-haven Japanese yen. This comes amid a modest pickup in the US dollar demand and provided an additional boost to the USD/JPY pair's intraday positive move beyond mid-107.00s.
However, worries about rising coronavirus cases globally dampened prospects for a sharp V-shaped global economic recovery. This, in turn, held investors from placing any aggressive bullish bets and kept a lid on any strong gains for the USD/JPY pair ahead of the Fed Chair Jerome Powell's testimony before the House Financial Services Committee.
In the meantime, traders will take cues from the US economic docket – featuring the release of Chicago PMI and the Conference Board's Consumer Confidence Index. Apart from this, the broader market risk sentiment and the USD price dynamics might further contribute towards producing some meaningful trading opportunities around the USD/JPY pair.
Technical levels to watch