- USD/JPY edges higher in tandem with gains in DXY, takes out 112 handle.
- The pair is trading a narrow range, consolidating the overnight rally.
- We see upside grinding in a 'Cup & Saucer' pattern, bias remains higher.
- Treasury yields retreated, in response to Trump’s comments, citing that he is studying ways to 'punish' currency manipulators, stalling upside in the USD.
- Data from Japan was mixed, household spending and Tokyo CPI disappointed markets, while unemployment rate and industrial figures bettered expectations.
- Focus now on the US core PCE price index and consumer sentiment data for further impetus in the US dollar.
- Meanwhile, FOMC member Dudley and Kahskari’s speech will also remain in the spotlight.
- Technical studies are slightly bullish, scope for test of 50-DMA at 113.05. Further gains only on break above.
Support levels - 111.35 (5-DMA), 110.10 (March 27 low), 109 (Channel base), 108.29 (200-DMA)
Resistance levels - 112.12 (23.6% Fib retrace of 118.66 to 110.10 fall), 113 (50-DMA), 113.50 (double top Feb 3 & Mar 17)
TIME TREND INDEX OB/OS INDEX
1H Neutral Neutral
4H Bullish Neutral
1D Slightly bullish Neutral
1W Neutral Neutral
Recommendation: Good to go long on rallies around 111.45/50, SL: 110.75, TP: 112/ 112.55/ 113
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 64.9938(Bullish), while Hourly JPY Spot Index was at -24.3291 (Neutral) at 0500 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
