USD/JPY extends near-term range bound movement around 112.00 handle

The USD/JPY pair remained confined within 100-pips trading band held since the beginning of this week and was seen extending the recovery move from the lower bound of the said range. 

Currently trading around 112.20-25 region, the pair has been struggling for a firm near-term direction amid growing political uncertainty in Europe, which seems to lend support to the Japanese Yen’s safe-haven appeal. 

However, the ongoing US Dollar recovery move, against the backdrop of last week’s strong jobs report and solid PMI print, has been collaborating towards limiting any sharp downslide around 2-1/2 month lows support near 111.60 region. 

Moreover, investors were also shying away from carrying big bets ahead of Japanese Prime Minister Shinzo Abe’s meeting with the US President Donald Trump on Friday.

Lighter US economic data on Thursday, with the only important release of weekly jobless claims, is unlikely to provide impetus for the pair’s near-term direction, albeit might provide some short-term trading opportunities.

Technical levels to watch

On a sustained break through 112.50-55 immediate hurdle, the pair seems to dart towards 112.70-75 resistance before eventually aiming to reclaim 113.00 handle and extend the up-move towards 113.20-25 barrier. 

On the flip side, weakness below 112.00 round figure mark might continue to find support near 111.60 area below which the pair seems vulnerable to slide towards testing 111.00 round figure mark, with 111.35 level (Nov. 28 low) providing some intermediate support.