I spy with my eyes a potential range play for swing forex traders!
As you can see, USD/JPY has been trading in a 140-pip range with the bulls defending the 112.00 – 112.20 levels and the bears attacking at the 113.50 area of interest.
What makes the setup more interesting today is that the dollar has just touched (and bounced) from the range support that we’re watching.
On a fundamental basis, the lack of major economic reports is keeping traders in holiday mode for a while yet. What I do know is that optimism over Trump’s latest tax bill could encourage more (dollar-denominated) investments into Uncle Sam and induce another round of dollar-buying.
The yen isn’t doing too badly, however. As Pip Diddy mentioned in his London session recap, dips in global bond yields are putting the spring in the yen’s steps today. This is probably why USD/JPY is having trouble getting upside momentum after the range support bounce.
Will the FOMC meeting minutes break this impasse? As we know, Yellen and her gang were pretty hawkish in their December statement as they upgraded their forecasts and continued to suggest more rate hikes to come in 2018.
For the next couple of trading sessions I’ll be keeping close tabs for possible upside momentum. Maybe USD/JPY will go back down to the 112.00 MaPs?
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