USD/JPY climbs to 6-day highs above 112.00 ahead of FOMC
USD/JPY rose back above 112.00, after finding support at 111.70, ahead of the FOMC meeting supported by a rally in Wall Street. The pair reached a 6-day high at 112.13.
The Dow Jones is up 0.51% and the Nasdaq gains 0.13%. US yields are flat, practicality uncharged for the day as traders await the Federal Reserve decision (18:00 GMT). Rates are expected to remain on hold and the focus is likely to be on the tone of the statement and on potential signals about the normalization of the balance sheet.
The pair arrives at the meeting, rising for the third day in a row, that follows a 400-pips slide that took place from July 10 until Monday. USD/JPY is still facing some pressure but the recent rally moved the price away from the 111.00 handle, that could be considered a relevant support.
The rise in US bond yields weakened the yen during the last two days. The 10-year climbed from 2.23% to 2.33%. Any surprise from FOMC statement could have a large impact on bonds and the yen.
Technical levels to watch
Immediate support is seen at 111.70 (daily low), followed by 111.30/35 (Jul 24 high) and 110.80 (Jul 25 low). On the flip side, resistance might lie at 112.20/25 (Jul2 13 low), 112.40 (Jul 20 high) and 112.85 (Jul 17 high / Jul 13 low).
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
