- USD/JPY is extending a break above 200-DMA. The pair is trading at 110.64 after hitting new 3-week highs at 110.66.
- US Dollar gained momentum on rumors that Fed’s Powell wants a press conference after every FOMC meeting.
- Further, data released on Tuesday showed US core-CPI rose to 0.2% and 2.2% in May on a monthly and yearly basis respectively, both figures matching the market expectations.
- Focus now on the upcoming Fed meeting where the Fed is virtually guaranteed to hike rates. Attention will be on the central bank's statements.
- Hawkish guidance could send the major to 112 levels. Test of 112.57 (78.6% Fib) on cards.
- Technical studies are bullish. Break above 200-DMA has raised scope for further upside.
- Next major bull target lies at 110.87 (61.8% Fib) ahead of 111 (major trendlone). Break above targets 78.6% Fib at 112.57.
- On the downside, retrace below at 200-DMA could negate bullish bias in the major.
Support levels - 110.18 (200-DMA), 110.05 (5-DMA), 109.68 (50% Fib)
Resistance levels - 110.87 (61.8% Fib), 111 (trendline), 111.39 (May 21 high)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-holds-above-21-EMA-at-10943-scope-for-test-of-200-DMA-at-11017-1346524) has hit all targets.
Recommendation: Ahead of FOMC meeting, the pair is unlikely to make decisive moves in either direction. Exit trade at highs as we expect volatility.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 109.534 (Bullish), while Hourly JPY Spot Index was at -169.363 (Bearish) at 0345 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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