- Spot met dip-buyers around 112.00.
- US 10-year yields bounced off 2.33%.
- US ADP report in the limelight.
The greenback is trading on the defensive vs. its Japanese peer on Wednesday, taking USD/JPY to briefly test the 112.00 neighbourhood, or session lows.
USD/JPY attention is now on ADP
After bottoming out in the 112.00 area, the pair managed to regain some attention in tandem with the rebound in yields of the key US 10-year reference, which are currently rebounding from daily lows in the 2.33% area.
Spot has fully faded yesterday’s bull run to the 112.80 region and is extending further the rejection from Monday’s tops in levels just above the 113.00 limestone.
In the meantime, headlines from the US tax reform bill should continue to be the almost exclusive driver for the buck’s price action in the near term, although some geopolitical jitters emerged in response to President Trump’s comments regarding Jerusalem.
Later in the NA session, the US ADP report will be the lone event in the US docket, with prior surveys expecting the labour gauge to come in at 185K for the month of November.
USD/JPY levels to consider
As of writing the pair is down 0.36% at 112.21 and a breach of 112.00 (low Dec.5) would open the door to 111.90 (38.2% Fibo of 107.33-114.73) and then 111.68 (200-day sma). On the other hand, the next up barrier is located at 112.77 (55-day sma) seconded by 112.88 (high Dec.5) and finally 113.09 (high Dec.4).
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