USD/JPY stuck in a range below mid-113.00s, US CPI & FOMC awaited


   •  Investors opt to wait and watch strategy ahead of key event risk.
   •  US CPI/FOMC outlook for 2018 would determine the next direction. 

The USD/JPY pair now seems to have entered a consolidation phase and was seen oscillating in a narrow trading range just below mid-113.00s.

A combination of diverging factors has failed to provide any fresh impetus to the major, with the pre-Fed nervousness also holding investors back from placing any fresh/aggressive bets. 

The US Dollar recovered some of its early lost ground triggered by news that the Alabama vote was won by Democrat's Doug Jones, which coupled with a goodish pickup in the US Treasury bond yields helped the pair to bounce off lows. 

The positive effect, to some extent, seems to have been negated by the prevalent cautious sentiment around equity markets, which tends to underpin the Japanese Yen's safe-haven demand and has eventually led to a range-bound/subdued price-action through the mid-European session.

Traders would now take cues from the latest US inflation figures and the US President Donald Trump's speech on the tax reform plan. The key focus, however, would remain on the much-awaited FOMC announcement and the accompanying rate statement/updated economic projections. 

Against the backdrop of progress surrounding tax reforms, the central bank's monetary policy outlook for 2018 would influence the pair's movement ahead of next week's BoJ monetary policy decision.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: "A negative close today (bearish doji reversal) could yield a deeper pullback to 111.90 levels (38.2% Fib R of Sep-Nov rally). However, the pullback is likely to be short-lived, given the ascending 10-day MA (currently at 112.90)."

"A close today above or later this month above 114.00 levels would open doors for a quick fire rally to 116.50 levels" he added further.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains depressed below the 1.1600 threshold

 EUR/USD struggles to regain the 1.1600 level after falling to a fresh weekly low of 1.1580. The dollar benefited from solid US macroeconomic data but softer yields capped its gains.

EUR/USD News

GBP/USD accelerates slide to 1.3760

 GBP/USD advanced to a daily high of 1.3830 during the European session but reversed its direction in the second half of the day. Fading BOE rate hike expectations and Brexit-related headlines weigh on the pound.

GBP/USD News

Gold losing its shine and the 1,800 threshold

Gold edged lower on Wednesday, trading as low as $1,782.31 a troy ounce. The greenback strengthened ever since the day started against its commodity-rival, getting a boost early in the American session from upbeat US data and rallying equities.

Gold News

Small correction ahead of cryptos before next leg up

BTC struggles cross above the Tenkan-Sen, could create profit-taking and a corrective move. ETH breaks out above a bullish continuation pattern, but momentum is weak. XRP continues to lag BTC and ETH but is poised to catch up in relative performance.

Read more

Bank of Canada Rate Decision: Inflation prospects headline policy review Premium

The Bank of Canada is expected to continue tapering its asset purchases and maintain its current rate posture when it concludes it meeting on Wednesday at 10:00 am EDT. Overnight rate projected to be unchanged at 0.25%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures