- USD/JPY moves around 110.60 during early Wednesday.
- The pair refrained from extending previous weakness due to lack of major catalysts and comments from the BoJ’s Kuroda.
- 111.30-40 is likely strong upside resistance for the pair with 110.30 seemingly nearby support.
The USD/JPY pair trades near 110.60 during the Asian sessions on Wednesday. The pair remains less active since the day start as fewer events remained present to entertain momentum traders. It should be noted that the pair refrained from declining further as comments from the BoJ Governor Haruhiko Kuroda and the overall recovery in the US Dollar favored the pullback.
On Tuesday, USD/JPY registered biggest losses since mid-Feb as the US Dollar declined across the board after weak data and Fed Chair’s testimony.
Having witnessed losses, the pair traders re-examined the drop amid lack of major catalysts during early Wednesday. Adding to the pair’s U-turn was comments from the Bank of Japan (BoJ) Governor Haruhiko Kuroda. Reuters reported that the BoJ’s Kuroda said that Any exit from BoJ’s ultra-easy policy will be very gradual. The comments favored easy money and weakened the Japanese Yen (JPY).
Looking forward, the second day of the Fed Chai Jerome Powell’s testimony and monthly second-tier statistics like pending home sales and factory orders are left to determine near-term market moves. At the political level, updates from the US President Donald Trump’s North Korea visit and how Trump’s ex-lawyer Michael Cohen testifies for the lies when saying no money were paid to silence Stormy Daniels will be observed.
While political developments are might help retain the JPY’s safe-haven allure, expected an increase in monthly pending home sales figures to +0.2% from -0.1% earlier contraction, coupled with likely +0.5% rise in monthly factory orders versus -0.6% previous, could support the USD.
USD/JPY Technical Analysis
Unless clearing 111.30-40 resistance-region that comprises of 200-day simple moving average (SMA), chances of the pair’s pullback to 110.30 and 50-day SMA level of 109.85 can’t be turned down.
Alternatively, pair’s ability to cross 111.40 can help it aim for 112.00 with 111.60 and 111.80 likely acting intermediate halts during the rise.
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