- USD/JPY edges lower from session highs at 111.59 after U.S. Consumer Spending data.
- Data released by the US Bureau of Economic Analysis showed US Personal Consumption Expenditures Price Index stayed unchanged at 2.2% y/y in June missing market expectation of 2.3%.
- The core version, which excludes volatile food & energy prices, remained steady at 1.9% in line with analysts' estimates.
- Japanese Yen was dented after BoJ held monetary policy unchanged and said it wants to pursue a more flexible policy.
- Statement from Governor Kuroda that there is no fundamental change in its yield curve control policy and firm forward guidance suggests gradual appreciation in the pair.
- Technical indicators support upside in the pair. Price has bounced off 55-EMA support and has broken above 21-EMA.
- Close above 21-EMA could see further upside. Scope then for test of 78.6% Fib at 112.57.
Support levels - 111.29 (21-EMA), 110.87 (61.8% Fib), 110.60 (55-EMA)
Resistance levels - 112, 112.57 (78.6% Fib), 113.18 (July 19 high)
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -109.594 (Bearish), while Hourly JPY Spot Index was at -111.28 (Bearish) at 1245 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
