USD/JPY steadies above 108 ahead of US data

10-year US Treasury bond yield falls for second straight day.
US Dollar Index consolidates Monday's gains above 98.50.
Coming up: Industrial Production and Capacity Utilization data from the US.

Eren Sengezer FXStreet

Despite the dismal market mood on Monday, the USD/JPY pair closed the day above the 108 handle and inched higher today to touch its highest level since August 1 at 108.36. However, with investors waiting for fresh developments surrounding the conflict in the Middle East and refraining from making large bets ahead of tomorrow's critical Federal Open Market Committee (FOMC) meeting, the pair seems to have gone into a consolidation phase. As of writing, the pair was up 0.05% on the day at 108.17.

Following Monday's sharp fall, the 10-year US Treasury bond yield seems to be pushing lower on Tuesday to show that the market sentiment is struggling to recover although there were no major developments about the drone attacks on the Saudi oil facilities. Meanwhile, the S&P 500 Futures is posting small losses to suggest that Wall Street is likely to open the day in the negative territory.

Markets turn quiet ahead of FOMC

On the other hand, the US Dollar Index (DXY) seems to be staying relatively calm after Monday's upsurge, allowing the pair to stay in its daily trading channel. Ahead of the Industrial Production and Capacity Utilization data that will be released by the Federal Reserve later in the day, the DXY is virtually unchanged on the day at 98.63.

Nevertheless, the pair is unlikely to show a significant reaction to the data ahead of FOMC's monetary policy announcements tomorrow. Experts expect the Fed to cut its policy rate by 25 basis points tomorrow but the focus will be on FOMC Chairman Powell's comments on the policy outlook.

Technical levels to watch for

USD/JPY

Overview
Today last price	108.18
Today Daily Change	0.04
Today Daily Change %	0.04
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

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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