USD/JPY upside faltered below 111.00, FOMC eyed

The greenback keeps the upside momentum well and sound vs. its Japanese counterpart on Wednesday, with USD/JPY testing the upper end of the range in the vicinity of the critical barrier at 111.00 the figure.

USD/JPY up on US yields rebound

The pair is extending the up move for the third consecutive session so far, advancing around 2% since Friday’s post-CPI lows in the 108.75/70 band, although the bull run seems to have lost vigour in levels just shy of the 111.00 handle.

The strong rebound stays bolstered by the solid performance of yields in the US money markets, with yields of the 10-year reference retaking the 2.28% level, or multi-day peaks.

In addition, the US Dollar Index (DXY) stays bid near recent tops in the 94.00 neighbourhood, deriving extra strength from auspicious releases in the US docket (retail sales, NY Empire State index).

Later in the session, the FOMC will publish its minutes of the latest meeting. Market attention will look for any details regarding further tightening by the Federal Reserve in the next months, either via rate hikes or balance sheet reduction.

USD/JPY levels to consider

As of writing the pair is gaining 0.13% at 110.81 facing the immediate hurdle at 110.94 (high Aug.16) followed by 111.06 (high Aug.4) and finally 111.30 (100-day sma). On the flip side, a breach of 110.14 (10-day sma) would open the door to 110.10 (23.6% Fibo of 114.51-108.73) and then 108.73 (low Aug.11).