USD/JPY: advancing with equities and yields, sellers around 107.00
|USD/JPY Current price: 106.47
- USD/JPY comfortable above 106.00 and short-term bullish.
- US calendar has little to offer today, attention centered on Fed's meeting.
The USD/JPY pair surged to a daily high of 106.60 and holds nearby mid-European session, as bond yields and equities trade in positive ground this Tuesday. The Japanese yen swung higher following comments from new BOJ's deputy governor Amamiya, who said that Japan is no longer in deflation, adding that he doesn't rule out adjusting rates before inflation reaches the 2.0% goal. Nevertheless, he later said that the BOJ decides in each meeting what's best on the yield-curve, cooling down demand for the JPY. Overnight, the Japanese Leading Economic Index for January was revised lower to 105.6, while the final Coincident Index resulted at 114.9, also below previous estimates.
The short-term picture is positive for the pair, as in the 4 hours chart, it has managed to settle above its 100 SMA that anyway maintains a bearish slope, while technical indicators advance within positive territory. The upward momentum eased amid the absence of fresh catalysts, but indicators hold near their daily highs. In the same chart, the 200 SMA heads lower around 107.10, providing ia strong resistance in the case of an upward acceleration through the mentioned high. Selling interest around this last should cap advances, particularly ahead of Fed's monetary policy decision on Wednesday. Below 106.20, on the other hand, the risk turns toward the downside.
Support levels: 106.20 105.90 105.55
Resistance levels: 106.60 107.10 107.45
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