USDJPY: consolidates ahead of FOMC minutes
USD/JPY remains near multi-month highs as the market awaits the FOMC minutes. Uncertainty over Bank of Japan (BoJ) policy and the wide US-Japan yield spread continue to pressure the Japanese Yen.
Recent statements by BoJ Governor Kazuo Ueda suggest that future rate hikes will depend on economic and financial developments, while in the US, strong economic data supports the USD. Non-manufacturing PMI and job openings beat expectations, boosting Treasury yields.
From a technical point of view, USD/JPY maintains a bullish bias initiated last month as long as it trades above 158.00, with targets at 159.00 and 161.946 (its last high to beat). Its key support is located at 157.00, the loss of which could trigger a move to deeper correction zones. If we observe the price is currently located around the Check Point, supporting its price above the most common trading zones. If the movement continues in a bullish tone, it could look for the midpoint of the channel. At the moment it seems to be in a mixed movement after a compression zone between the month of October and part of December. The RSI is currently overbought at 67% and the average cross continues to widen its price, so it does not look like it will stay there and seek to test the price of the highs of July last year.
The market will be watching the FOMC minutes, which could influence the direction of the dollar ahead of Friday's Non-Farm Payrolls report.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Recent statements by BoJ Governor Kazuo Ueda suggest that future rate hikes will depend on economic and financial developments, while in the US, strong economic data supports the USD. Non-manufacturing PMI and job openings beat expectations, boosting Treasury yields.
From a technical point of view, USD/JPY maintains a bullish bias initiated last month as long as it trades above 158.00, with targets at 159.00 and 161.946 (its last high to beat). Its key support is located at 157.00, the loss of which could trigger a move to deeper correction zones. If we observe the price is currently located around the Check Point, supporting its price above the most common trading zones. If the movement continues in a bullish tone, it could look for the midpoint of the channel. At the moment it seems to be in a mixed movement after a compression zone between the month of October and part of December. The RSI is currently overbought at 67% and the average cross continues to widen its price, so it does not look like it will stay there and seek to test the price of the highs of July last year.
The market will be watching the FOMC minutes, which could influence the direction of the dollar ahead of Friday's Non-Farm Payrolls report.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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