USD/JPY remains on the defensive, downside seems limited ahead of US CPI

USD/JPY witnessed a modest pullback from weekly tops, though lacked follow-through.
A modest USD strength, pickup in the US bond yields extended some support to the pair.
Investors might refrain from placing any aggressive bets ahead of the latest US CPI report.

Haresh Menghani FXStreet

The USD/JPY pair retreated over 20 from weekly tops and refreshed daily lows during the early European session, albeit quickly recovered few pips thereafter. The pair was last seen trading around the 109.55 region, down only 0.05% for the day.

The pair struggled to capitalize on the previous day's goodish rebound from the vicinity of the 50-day SMA support near the 109.20 region, instead met with some fresh supply on Wednesday. However, a combination of factors held traders from placing any aggressive bearish bets around the USD/JPY pair and helped limit the downside.

The US dollar gained some follow-through traction amid some repositioning trade ahead of the US consumer inflation figures, due later during the early North American session. Apart from this, a modest pickup in the US Treasury bond yields further underpinned the greenback and extended some support to the USD/JPY pair.

The market focus will remain glued to the US CPI report, which will be an important macro data that would set the tone for the upcoming FOMC meeting on June 15-16. This, in turn, will play a key role in influencing the near-term USD price dynamics and assist investors to determine the next leg of a directional move for the USD/JPY pair.

Heading into the key data risk, investors might prefer to remain on the sidelines. This might lead to a subdued/range-bound price action amid the prevalent cautious mood.

Technical levels to watch

USD/JPY

Overview
Today last price	109.55
Today Daily Change	-0.07
Today Daily Change %	-0.06
Today daily open	109.62

Trends
Daily SMA20	109.34
Daily SMA50	109.17
Daily SMA100	107.94
Daily SMA200	106.25

Levels
Previous Daily High	109.66
Previous Daily Low	109.23
Previous Weekly High	110.33
Previous Weekly Low	109.33
Previous Monthly High	110.2
Previous Monthly Low	108.34
Daily Fibonacci 38.2%	109.49
Daily Fibonacci 61.8%	109.39
Daily Pivot Point S1	109.35
Daily Pivot Point S2	109.07
Daily Pivot Point S3	108.92
Daily Pivot Point R1	109.78
Daily Pivot Point R2	109.94
Daily Pivot Point R3	110.21

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.