USDJPY little changed at 114.00 mark after US data, Fed holds the key

The USD/JPY pair extended its range-bound price action and had a little reaction to the US economic data.

Currently in neutral territory, hovering around 114.00 handle, the pair on Tuesday was confined in a narrow trading range and struggled for a firm direction. Even larger-than-expected US international trade deficit and lower-than-expected US non-farm productivity for Q3 failed to provide any impetus and the pair remained capped below last week's multi-month highs, albeit the pair did make a failed attempt to take that out on Monday. 

Meanwhile, the pair has failed to break through 115.00 psychological mark and looking at the recent price-action, the pair seems to have lost its upside momentum amid retracing US Treasury bond yields. However, a possible readjustment of positions, heading into next week's important FOMC meeting, could be another reason for the pair's range-bound price action. 

Meanwhile, the steady climb in the US equities is pointing to strong investors’ appetite for riskier assets and might continue to weigh on safe-haven demand for the Japanese Yen, eventually paving way for further near-term up-move for the major. 

 Technical outlook

Valeria Bednarik, Chief analyst at FXStreet, notes, "The short term picture is neutral-to-bearish, as in the 1 hour chart, the price is stuck around its 100 SMA, while technical indicators have lost their bearish strength within positive territory after reaching their mid-lines. In the 4 hours chart, the technical picture is also neutral, as technical indicators head nowhere around their mid-lines, although given that the 100 SMA continued rallying below the current price, the risk of a deeper bearish move is limited. A bearish move will remain as corrective as long as the price holds above 112.80, this week's low, while a break above 114.90 is required to confirm a new leg higher, towards the 116.60 price zone."