USD/JPY hammering closer to the 110 handle, Greenback bidding up ahead of the FOMC

The USD continuing its upward stretch, Yen struggling to move out of the way fast enough.
FOMC meeting unlikley to bring another rate hike, but still could send markets into a frenzy.

Joshua Gibson FXStreet

The USD/JPY is lifting once more, searching for 110.00 after falling back into 109.60 in the early Asia session.

The US Dollar continues to march up the charts against the broader FX market, and the Bank of Japan's (BoJ) recent softness is still fresh in trader's minds, noting that the central bank is still committed to their hyper-easing monetary policy, and lagging inflation figures for Japan's economy means the BoJ is even further out from any rate hikes than most market participants believed only a few months ago.

USDJPY: Seems likely to trade a narrow range ahead of the FOMC

The US session for Wednesday sees the FOMC's Monetary Policy Meeting at 18:00 GMT, and while the FOMC is widely expected to stand pat on rates this week, traders will be keeping a close eye as they try to determine how close the Fed is to calling for additional rate hikes this year. The FOMC currently only plans to raise interest rates two more times in 2018, but many traders are expecting the US' growing economy to eke a third rate hike before the end of the year.

USD/JPY analysis: modest advance, still in the way to break above 110.00

USD/JPY levels to watch

Greenback buyers are aiming their sites directly at the 110.00 major handle in the USD/JPY pair, and as FXStreet's own Valeria Bednarik noted earlier, "the pair retains its positive stance according to technical readings in the 4 hours chart, as it holds far above bullish moving averages, while the Momentum indicator heads north at weekly highs, and the RSI retreats modestly after testing 70. Overall, a break of 110.00 seems likely with a hawkish Fed, with steady gains above it favoring an advance up to 111.20 the next big static resistance level."

Support levels: 108.95 108.60 108.25

Resistance levels: 109.50 109.90 110.20

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.