|

USD/JPY: at 3-week highs ahead of Fed

USD/JPY Current price: 110.55

  • Dollar raises ahead of Fed's decision as market participants anticipate a rate hike.
  • US Treasury yields pressure their weekly highs, adding to the bullish case of the pair.

The USD/JPY pair is up to fresh 3-week highs as expectations that the US Federal Reserve will pull the trigger later today are pushing the dollar higher across the board, alongside with a persistent positive mood after the Trump-Kim meeting and Brexit news, which saw PM May score her first parliamentary victory in a long time. In the meantime, US Treasury yields hold near their weekly highs with the yield for the 10-year note around 2.97%.

The Fed's monetary policy meeting is the key event of the day, with the market expecting a 25 bps rate hike. Speculative interest will be also closely watching the dot-plot, looking for a confirmation, or denial of a fourth rate hike this year and a more clear picture for the upcoming years. That would be the best case scenario for the dollar and could see the pair extending its advance up to 111.39, May high.

Short-term, and according to the 4 hours chart, the upside is favored despite the absence of bullish momentum, as the pair remains comfortable above its 100 and 200 SMA, and above the 61.8% retracement of its latest daily slump at 110.15. Technical indicators in the mentioned chart have reached overbought readings before partially losing their upward strength, far from signaling a reversal and rather reflecting a pause ahead of the big event that will take place in the American afternoon.

Support levels: 110.15 109.70 109.35

Resistance levels: 110.80 111.05 111.40

View Live Chart for the USD/JPY

Author

Valeria Bednarik

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

More from Valeria Bednarik
Share:

Editor's Picks

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage. 

GBP/USD recovers losses despite rising UK political risks, BoE rate cut bets

Pound Sterling advances against the US Dollar after registering modest losses in the previous session, trading around 1.3650 during the Asian hours on Wednesday. The pair could extend losses as the Pound Sterling faces pressure from rising political risks in the UK and growing expectations of near-term Bank of England rate cuts.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release. 

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

BNB prolonged correction signals deeper bearish momentum
BNB (BNB), formerly known as Binance Coin, is trading below $618 on Wednesday, marking the sixth consecutive day of correction since the weekend. The bearish price action is further supported by rising short bets alongside negative funding rates in the derivatives market.