- Broad-based USD weakness weighs on the pair.
- Wall Street looks to open flat on Tuesday.
- Housing market and consumer sentiment data from the U.S. will be coming up next.
After failing to reach the critical 112 mark and finishing the day virtually unchanged at 111.66 on Monday, the USD/JPY pair came under a renewed pressure today and slumped to its lowest level in 19 days at 111.23. As of writing, the pair was trading a couple of pips above that level, losing 0.33% on a daily basis.
The broad-based USD weakness today weighs on the pair as investors are looking to reposition themselves ahead of tomorrow’s critical FOMC meeting. The US Dollar Index, which posted its highest weekly close of 2019 at 98.05 on Friday, turned south yesterday and extended its slide today. The decisive rally witnessed in the EUR/USD pair on the back of upbeat GDP data from the euro area put additional weight on the buck’s shoulders.
Previewing the Fed event, BBVA analysts said that they were expecting the Fed to maintain the committee’s current policy stance while reemphasizing its “patience” with respect to interest rates and confirming its plans to end its quantitative tightening program.
Before the Conference Board publishes its Consumer Confidence Index, the DXY is losing 0.3% on the day at 97.56. Pending home sales and the S&P/Case-Shiller Home Price Index will also be featured in the U.S. economic docket today, which is likely to be ignored by the market participants.
Technical outlook
A daily close below 111.55 (200-DMA) could bring in more technical sellers and cause the bearish pressure to gather strength. On the downside, the pair could face technical supports at 110.90 (Apr. 11 low), 110.60 (100-DMA) and 110 (psychological level). Near-term resistances, on the other hand, could be seen at 111.35 (50-DMA), 111.55 (200-DMA) and 112 (psychological level).
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