- USD/JPY: the pair has been oscillating in familiar ranges, capped by the descending daily resistance line.
- USD/JPY: US 10’s continue to consolidate hindering the bull’s chances of a run on 111.50 option barrier level.
USD/JPY is toying with 111 the figure, oscillating between 110.79 and 111.18 as the DXY moves higher within the day’s range of between 93.2910-93.7340 as 10′ inch up within the 3.05%-3.08% range.
USD/JPY has traded up to a strong level of resistance on the 111 handle, just below where barrier levels are sighted at 111.50. This is a hard resistance area and eyes will look to the FOMC minutes for fresh impetus, scanning the text for any clues of hawkishness that will confirm a rate hike as soon as June, propelling the dollar higher on Central Bank divergence; (BoJ’s Governor Kuroda was sighted saying that the economy is expanding moderately, yet still a distance to price goal. The Deputy Governor, Wakatabe, said that Japan can achieve the price target with current policy).
No expectations for a notable change in trajectory of US-China trade – Nomura
FOMC minutes eyed
Between now and the release of the FOMC minutes this week, the US yields will continue to determine the pair’s fate. Ears will also be close to the ground for further developments around trade talks with the likes of NAFTA and China a familiar noise input to the price action in the pair – the dollar has been supported on the trade war truce between China and the US, but just how China intends on decreasing the surplus begs another question and remains a risk for the dollar.
USD/JPY levels
Bulls continue to eye the 112.30’s, (Fibos at 112.22/33). However, 111.50 as a suspected option barrier holds for now where the daily descending resistance kicks in just below at the aforementioned daily highs. Below the 200-D SMA, (110.19), 109.40/50 guards a run towards and a break below the 108.50 level; This will open risk towards the 50-D SMA before the 2018 low at 104.63 as a key support.
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