USD/JPY consolidates near 1-1/2 month tops, comfortably above 108.00 handle


  • Resurgent USD demand helped reverse the bearish gap on Monday.
  • The global flight to safety underpinned the JPY and capped gains.
  • Focus remains on this week’s key central bank meetings – FOMC & BoJ.

The USD/JPY pair now seems to have entered a consolidation phase and was seen oscillating in a range just below 1-1/2 month tops, set earlier this Tuesday.
 
Despite the latest escalation of geopolitical tensions in the Middle East, following drone attacks on oil fields in Saudi Arabia, the pair on Monday witnessed a dramatic intraday turnaround and rallied around 70-pips from an early low to levels just below mid-107.00s.

The upside seems capped ahead of FOMC/BoJ

The overnight goodish move up was solely driven by resurgent US Dollar demand and the momentum extended through the early Asian session on Tuesday, albeit investors' reluctance to place aggressive bets ahead of the key central bank meetings capped further gains.
 
Meanwhile, the fact that surging Oil prices might have raised fears of a global economic slowdown now seemed to underpin the Japanese Yen's safe-haven demand and further collaborated towards keeping a lid on any strong follow-through appreciating move for the major.
 
However, the fact that the pair has found acceptance above 100-day SMA for the first time since early-May support prospects for an extension of the recent bullish trajectory, though investors are likely to wait for a fresh catalyst from the highly anticipated FOMC decision.
 
The Fed is widely expected to cut interest rates again at the conclusion of a two-day meeting on Wednesday but opinions on further easing remain divided. This will be followed by the latest BoJ monetary policy update on Thursday, which might further contribute towards determining the pair's next leg of a directional move.
 
In the meantime, the broader market risk sentiment and the USD price dynamics might continue to influence the price action and contribute towards producing some short-term trading opportunities amid absent relevant market-moving US economic releases on Tuesday.

Technical levels to watch

USD/JPY

Overview
Today last price 108.23
Today Daily Change 0.09
Today Daily Change % 0.08
Today daily open 108.14
 
Trends
Daily SMA20 106.74
Daily SMA50 107.14
Daily SMA100 108.08
Daily SMA200 109.4
Levels
Previous Daily High 108.17
Previous Daily Low 107.48
Previous Weekly High 108.26
Previous Weekly Low 106.76
Previous Monthly High 109.32
Previous Monthly Low 104.45
Daily Fibonacci 38.2% 107.91
Daily Fibonacci 61.8% 107.74
Daily Pivot Point S1 107.69
Daily Pivot Point S2 107.24
Daily Pivot Point S3 107
Daily Pivot Point R1 108.38
Daily Pivot Point R2 108.62
Daily Pivot Point R3 109.07

 

 

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