USD/JPY confined in a narrow range around 111.00 handle

In a relatively quiet Asian trading session on Wednesday, the USD/JPY pair traded with mild negative bias was confined in a narrow trading range just below 111.00 handle.

The pair seems to have entered near-term consolidation phase after its recent sharp up-surge of over 1000-pips, following Donald Trump's surprise victory in the US presidential election. Thin liquidity, on the back of a National holiday in Japan, has failed to provide any impetus, while prevalent cautious sentiment around Asian equity market is extending some support to the Japanese Yen's safe-haven appeal and restricting the pair just below the multi-month tops. 

Moreover, investors seems reluctant to build fresh bullish USD bets ahead of today's FOMC minutes from November 1-2 meeting, which would be looked upon for further clarity on the Fed's near-term monetary policy outlook and would be key factor determining the next leg of directional move for the pair. 

On the economic data front - monthly durable goods orders, weekly jobless claims and new home sales data, might provide some impetus for the pair during NA session. 

Technical levels to watch

Weakness below 5-day SMA support near 110.80 region is likely to get extended towards 110.45 (Monday's low) ahead of 110.27 (yesterday's low) below which the pair is likely to witness a corrective slide towards 109.75 horizontal support. On the upside, sustained move above 111.15 immediate resistance might continue to confront resistance near 111.35 area and is closely followed by resistance near 111.45 level (May highs).

To learn more about this topic, check our video analysis