The JPY was one of the rare currencies that pushed higher against the US dollar during yesterday's risk-off mood, but the currency gave back some gains this morning as demand for the US dollar increased ahead of the FOMC minutes.
Markets lack reasons to turn bearish on the USD, and the FOMC minutes will be a key event to follow this evening.
Latest Headlines:
JPY News:
- USD/JPY recovers further from one-week lows, climbs to 110.70-75 area - Japan May preliminary leading indicator index 102.6 vs 103.8 prior - Japan Leading Economic Index came in at 102.6, below expectations (103.5) in May - Japan Coincident Index below expectations (95.1) in May: Actual (92.7) - Japan JP Foreign Reserves: 1376.5B (June) vs previous 1387.5B - USD/JPY remains defensive near 110.50 as US Treasury yields sinks
USD News:
- US Dollar Index clings to gains in the mid-92.00s, looks to FOMC - US dollar at the mercy of the market's take on FOMC minutes - US 10-year Treasury yields refresh 19-week low - US urges China, private sector to boost participation in G20 debt response
Upcoming Market Reports:
Here are the most important market reports for USD/JPY to follow in the coming days (all times are UTC timezone):
Wednesday at 14:00: USD JOLTS Job Openings (Expected: 9.30M, Previous: 9.29M) Wednesday at 18:00: USD FOMC Meeting Minutes Thursday at 12:30: USD Unemployment Claims (Expected: 345K, Previous: 364K) Thursday at 15:00: USD Crude Oil Inventories (Previous: -6.7M)
SENTIMENT:
Risk Sentiment:
JPY is the weakest currency for the day as risk sentiment slightly improved this morning, pushing commodity currencies to the top spots in our currency strength index.
TECHNICALS
The technical picture for USDJPY is improving. The pair retraced at a long-term bullish trendline and broke above a shorter-term bearish trendline, with the levels nicely aligning with the 61.8% Fib level on the daily chart.
The bullish divergence in the RSI and the strong horizontal support around 110.40 point at further strength in the pair.
Levels to follow (Liquidity):
Major resistance: 111.66 Minor resistance: 111.00 (weekly high) Major support: 110.40 (weekly and daily low)
== SUMMARY ==
I would be looking to trade USDJPY from the buy side. Today's FOMC minutes could provide a clear direction for the pair by further supporting the USD bull.
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