USD/JPY remains around 130.00 on a volatile session after US data, ahead of FOMC

US Dollar tumbles during the American session as FOMC meeting kicks off.
US yields move down, then rebounds, making USD/JPY volatile.
The pair trades above 130.00 after hitting a fresh daily low at 129.73.

Matías Salord FXStreet

The USD/JPY tumbled and then redounded during the American session, but overall it remained in a familiar range, hovering around 130.00

Mixed US data

The surprise of the day so far was the influence of the Employment Cost Index (ECI). The numbers triggered price action across financial markets. The ECI rose 1% in the fourth quarter, below the 1.1% of market consensus. It points to a continuation of the slowdown in inflation. Following the report, the Dollar tumbled, Wall Street soared and Treasury yields rose.

A different economic report showed the S&P/Case-Shiller Home Price Index rose by 6.8% (y/y) in November below the 6.9% of market consensus and the 8.7% of the previous month. Conference Board announced the Consumer Confidence Index came in at 107.1 in January below the expected 109.0.

The two-day FOMC meeting has started. Market participants expect the Federal Reserve to raise interest rates by 25 basis points. The focus will be on the statement and the projections. Analysts will look for clues about the future path of monetary policy.

USD/JPY down, then trims losses

The USD/JPY bottomed at 129.73 after the ECI. It was rejected from under 130.00 as US yields rebounded amid risk appetite. It climbed to the 130.20 area. Despite the moves, the pair continues to trade within last week’s range.

A consolidation above the upper limit around 130.50 should clear the way to more gains while below 129.00, the slide could accelerate. Before the 129.00 zone, an intermediate support is located at 129.60.

Technical levels

USD/JPY

Overview
Today last price	130.16
Today Daily Change	-0.30
Today Daily Change %	-0.23
Today daily open	130.46

Trends
Daily SMA20	130.37
Daily SMA50	133.6
Daily SMA100	139.34
Daily SMA200	136.77

Levels
Previous Daily High	130.57
Previous Daily Low	129.21
Previous Weekly High	131.12
Previous Weekly Low	129.02
Previous Monthly High	138.18
Previous Monthly Low	130.57
Daily Fibonacci 38.2%	130.05
Daily Fibonacci 61.8%	129.73
Daily Pivot Point S1	129.59
Daily Pivot Point S2	128.72
Daily Pivot Point S3	128.23
Daily Pivot Point R1	130.95
Daily Pivot Point R2	131.44
Daily Pivot Point R3	132.32

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.

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