Search ForexCrunch

   “¢   The post-FOMC USD recovery prompts some short-covering move.  
   “¢   Positive US-China trade-related news provides an additional boost.
   “¢   A follow-through buying needed to confirm any additional up-move.  

The USD/JPY pair regained some positive traction on Thursday and built on the overnight post-FOMC goodish bounce from the 111.00 neighbourhood or three-week lows.  

As was widely expected, the Fed left interest rates unchanged but the accompanying monetary policy statement showed a more upbeat assessment of the economic developments. This followed by the Fed Chair Jerome Powell’s comments at the post-meeting press conference, attributing softening inflation to transitory factors dampened prospects for any rate cut this year and prompted some aggressive US Dollar short-covering move.

The pair got an additional boost during the Asian session on Thursday amid positive news flow on the US-China trade negotiations, suggesting that the world’s two largest economies may announce a trade deal by next Friday, which further dented the Japanese Yen’s perceived safe-haven status. It would now be interesting to see if the pair is able to capitalize on the up-move or continues with its struggle to sustain above the very important 200-day SMA.  

Today’s US economic docket – featuring the second-tier releases of Challenger Job Cuts, initial weekly jobless claims, preliminary Nonfarm Productivity and Unit Labor Cost, will be looked upon for some short-term trading impetus but the key focus will be on Friday’s closely watched US monthly jobs report – popularly known as NFP.  

Technical levels to watch