USD/JPY consolidates in a range near mid-111.00s, 2-week tops ahead of US macro data

   •  US-China trade optimism boosts risk sentiment and weighs on JPY’s safe-haven demand.
   •  Surging US bond yields provides an additional boost and remained supportive of the move.
   •  Further gains remained capped ahead of today’s release of ADP report and ISM services PMI.

The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band around mid-111.00s, or two-week tops.

After yesterday's directionless move, a fresh wave of global risk-on trade weighed heavily on the Japanese Yen's safe-haven status and assisted the pair to catch some fresh bids during the Asian session on Wednesday. 

Against the backdrop of growing optimism over progress in the US-China trade talks, upbeat Chinese data eased fears of a deeper slowdown in the world's second-largest economy boosted investors' appetite for riskier assets.

The risk-on mood was evident from a sharp intraday upsurge in the US Treasury bond yields, which failed to provide any meaningful boost to the US Dollar but remained supportive of the pair's intraday positive move. 

Bulls, however, took some breather near the very important 200-day SMA and preferred to wait on the sideline ahead of today's important US economic releases - ADP report and ISM non-manufacturing PMI, for some fresh impetus.

The upcoming macro releases, which might serve as a precursor to Friday's official monthly jobs report (NFP) will influence the USD price dynamics and contribute towards producing some meaningful trading opportunities.

Technical levels to watch