USD/JPY: risk skewed to the downside ahead of FOMC's Minutes
|USD/JPY Current price: 110.27
- Trump´s words continue affecting the greenback, decline paused ahead of fresh Fed´s clues.
- US Treasury yields on the back foot leading the USD/JPY pair lower.
The USD/JPY pair eases from the 110.50 region as the dollar remains in trouble across the board, pressured by Monday's comments from President Trump, and surging equities, that fueled demand for high-yielding currencies, adding pressure on the greenback. The Japanese currency today is following US Treasury yields, which resume their decline after a modest advance late Tuesday, with the benchmark 10-year note currently at 2.82% from 2.85% yesterday. In the data front, Japan released the June All Industry Activity Index, which resulted worse-than-expected, printing -0.8% vs. the expected -0,7%. The US will publish today July Existing Home Sales, seen recovering from May's slump. More relevant, the FOMC will release the Minutes of its latest monetary policy. Majors can trade in limited ranges ahead of the release, as investors will try to found fresh clues on future moves. Seems unlikely that the Minutes will shed some light on Powell's reaction to Trump's criticism to higher rates.
The short-term picture for the pair is bearish, as in the 4 hours chart, technical indicators have retreated for a second consecutive day from their midlines, maintaining downward slopes but above these days' low. In the meantime, the pair continues developing below its 100 and 200 SMA, with the shortest now around 111.00. An immediate support comes at around 110.00, with a break below it favoring a continued slide toward the 109.00 figure, a likely scenario in the case of disappointing Minutes.
Support levels: 109.75 109.40 109.00
Resistance levels: 110.60 111.00 111.45
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