- USD/JPY hovers around 110 handle, extends range trade ahead of US CPI and FOMC meeting.
- Markets refrain to place any directional bets ahead of plenty of risk events.
- Increased demand for the Yen amid negative oil prices and treasury yields, points towards risk-averse market conditions.
- High probability of Greenback sustaining the corrective up move post the FOMC meeting.
- 200-DMA at 110.43 is stiff resistance and we see further upside only on break above.
- Technical indicators are not conclusive, RSI flatlined below 50 level and MACD still bias lower.
- Market have largely priced in a rate hike from the Fed, the statement will be key for driving market sentiment.
Support levels - 110.08 (5-DMA), 110, 109.25 (trendline), 109.11 (June 7th low)
Resistance levels - 110.43 (200-DMA), 110.61 (23.6% Fib of 118.662 to 108.130 fall), 110.75 (20-DMA)
Recommendation: We prefer to wait for clear directional bias.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -26.8384 (Neutral), while Hourly JPY Spot Index was at -65.7798 (Neutral) at 0515 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
