US Dollar weakness pressures USD/JPY as Fed jitters grow

Following Monday’s decent gains, USD/JPY faces renewed downside pressure on Tuesday's turnaround, coming all the way down to retest the 147.00 region, where some decent contention seems to have turned up.

USD/JPY focused on Fed, data

The daily pullback, in the meantime, comes in response to fresh selling bias around the US Dollar, which was particularly reignited after President Donald Trump’s attempt to fire FOMC Governor Lisa Cook.

That move appears to have woken up fears over the Fed’s independence, keeping the Greenback’s price action depressed amid mixed US yields across different time frames.

Data-wise, on the US calendar, Durable Goods Orders contracted at a monthly 2.8% in July, while the Conference Board’s Consumer Confidence eased to 97.4 in August. Additional data was centred on the housing sector, with the FHFA’s House Price Index dropping by 0.2% in June from a month earlier, and the S&P/Case-Shiller Home Price index coming in flat on a monthly basis also in June.

On the tech front

If USD/JPY breaks above the weekly high at 148.77 (August 22), it would bring the 200-day SMA at 149.00 back into focus, followed by the August peak at 150.91 (August 1). A sustained move higher could then target the March top at 151.30 (March 3) and the weekly high at 154.79 (February 13).

On the downside, initial support lies at the August low of 146.21 (August 14), followed by the weekly trough at 145.85 (July 24). Further weakness would put the 100-day SMA at 145.46 into play, ahead of the July base at 142.67 (July 1) and the May low at 142.10 (May 27).