Several FOMC members are lined up to give speeches today, so I’m on the lookout for exciting moves on USD/JPY.
Think the pair’s range resistance might hold?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist talked about CHF/JPY testing the bottom of its range after the SNB decision. Be sure to check that out to see if there is still a potential play!
Fresh Market Headlines & Economic Data:
- Suez Canal blockage lifts WTI crude oil back above $60 per barrel before retreating
- North Korea launched two ballistic missile tests ahead of Tokyo Olympics
- U.S. SEC rolled out law aimed at delisting Chinese tech stocks
- BOJ Governor Kuroda: Central bank to buy ETFs as needed
Upcoming Potential Catalysts on the Economic Calendar:
- German GfK consumer climate index at 7:00 am GMT
- SNB monetary policy decision at 8:30 am GMT
- BOC Governor Macklem’s speech at 9:30 am GMT
- ECB head Lagarde’s speech at 9:30 am GMT
- Deutsche Bundesbank President Weidmann’s speech at 9:30 am GMT
- BOE Governor Bailey’s speech at 9:30 am GMT
- EU Economic Summit starts today
- U.S. final Q4 2020 GDP due at 12:30 pm GMT
- FOMC members Clarida, Williams, Bostic, Evans, and Daly to testify
What to Watch: USD/JPY
USD/JPY is cruising sideways on its short-term chart, finding support at the 108.50 minor psychological mark and aiming for resistance at 109.20.
The yen has been under some downside pressure earlier since the North Korean ballistic missile tests have cast a grim outlook for the Tokyo Olympics.These have coincided with the start of the Olympic torch relay in Japan, leading the country’s Prime Minister to warn that the move “represents a threat to peace and stability in Japan and the region.”
This could take the pair up to the range resistance, but are dollar bears about to jump back in soon?
Technical indicators are hinting that the top of the range would likely hold, as the 100 SMA is below the 200 SMA while Stochastic is approaching the overbought zone.
Whether or not the range top holds could depend on the speeches of FOMC officials, as their monetary policy bias would likely impact the dollar’s direction.Keep in mind, though, that Powell has been emphasizing that there’s no need to tighten just yet, so his fellow Fed officials might share the same view.
