USD/JPY Struggle with 114 Continues Ahead of BOJ, FOMC
The USD/JPY pair attempts to extend Friday’s gains and reclaim 114 handle in the Asian trades, setting-off the week on an upbeat note amid improved risk sentiment.
USD/JPY upside capped by 114 handle
The dollar-yen pair has reversed more than half of post-ECB slide and now remains firmer in the run up to the key central banks’ events this week. While the upward pressure on the yen may induce BOJ to ease further at its policy decision due tomorrow, the Fed is widely expected to stand pat this Wednesday. At the time of writing, USD/JPY trades 0.07% higher at 113.90, receding a spike to 114 session highs.
The major also remains belter bid as the risk sentiment remains favourable towards the US dollar on the back of strong gains seen on the Asian indices, particularly the Japanese stocks. Japan’s Nikkei rallies 2%, while the Shanghai Composite is up +1.70%.
Further, markets appear to ignore stronger than expected Japanese core machinery orders, which rose at the fastest pace in almost 2 years. Core machinery jumped 15.0% m/m in January, coming in much better than the 2.0% increase forecast and compared to the 4.2% rise in orders in December.
Looking ahead, attention now remains on the BOJ decision due tomorrow in absence of relevant fundamental triggers on the cards this Monday.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 114 (daily high/ psychological levels). A break above the last, the major could test 114.45/54 (Mar 10 High/ 10-DMA). While to the downside, the immediate support is seen at 113.49 (1h 200-SMA) and below that at 113.28/21 (20-DMA/ 1h 100-SMA).
(Market News Provided by FXstreet)
