USD/JPY chart - Trading View
- USD/JPY trades rangebound around 200-DMA as traders shrugged off strong GDP data on Friday.
- It is a quiet start to the week as Japan remains closed on account of Showa day holiday, with no data scheduled in other Asian economies.
- According to Friday's GDP report, the US economy grew 3.2% in Q1, significantly better than the market's 2.3% forecast.
- The greenback subdued ahead of Fed policy meeting later this week as investors worry that softer price growth will prevent the central bank's optimism.
- Since the last Fed meeting, data has been positive. Job growth, retail sales, manufacturing activity and inflation ticked higher.
- Markets now await to see if the FOMC policymakers will recognize the improvements in data.
- That said, U.S. Treasury yields edge lower, suggesting market is anticipating more dovishness coming from US policymakers.
- Technical indicators are inconclusive. The pair is hovering around 200-DMA and RSI is flat-lined around 51 levels.
- Below 200-DMA the pair finds serious of strong support till daily cloud at 110.88. Break below cloud top to see further weakness.
- Focus this week also on U.S. for ISM manufacturing and non-farm payrolls for further clues.
Support levels - 111.50 (200-DMA), 111.31 (50-DMA), 110.88 (cloud top)
Resistance levels - 111.75 (5-DMA), 112, 112.40 (Apr 24 high)
For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
