USD/JPY pares earlier losses and returns to 105.40 area
- USD/JPY extends its rebound from 105.15 to 105.40 area
- Bright US consumption data boosts US dollar's recovery.
- The dollar might remain between 105.00 and 106.00 for some time – UOB
Greenback's rebound from session lows at 105.15 has extended during Friday’s US session, with the pair stretching to the mid-range of 105.00, supported by positive US data. The US dollar has regained lost ground, after a weak session opening.
The dollar supported by upbeat consumption data
The USD traded lower against its main rivals on Friday’s early trading, with the major equity indexes in the green, as the market shrugged off the risk-averse sentiment witnessed on previous days. The pair, however, changed direction following better than expected US retail consumption data, which has eased concerns about the strength of US economy.
Despite the recent recovery, the US dollar has remained trapped between 105.00 and 106.00 against the yen for the third consecutive week and is on track a 0.3% loss this week. The Japanese yen has appreciated across the board, favoured by a dismal market sentiment amid the disappointment regarding the fiscal stimulus deal in the US and the tightening COVID-19 restrictions in Europe.
USD/JPY might remain between 105.00 and 106.00 for some time – UOB
From a longer-term perspective, the FX Analysis team at UOB sees the pair mixed, likely to remain between 105.00 and 106.00 for the next weeks: “While the bias is tilted to the downside, USD has to close below 104.70 before a sustained decline can be expected. For now, the prospect for such a move is not high but it would increase quickly as long as USD does not move above 105.70 within these few days.”
Key levels to watch