The USD/JPY is trying to hold on to the gains on top of 112.00 before the announcement of important US data today along with the Federals Reserve’s announcement. We didn’t witness any moves worth mentioning during the Asian session due to the holiday in the Japanese markets and the weak Yes in light of calm geopolitical fears, which helped the US dollar to make gains. Based on that, the USD/JPY reached its highest levels in a month at the 112.30 top yesterday. The bullish move for the pair still needs to achieve stronger gains to confirm the bullish trend. It will all depend on the Federal Reserve’s announcement today about the monetary policy. Despite strong expectations that the bank will maintain its current rate of 1%, the focus is on the content of the monetary policy announcement after the decision to look for clues about the suitable date for the next rate hick.
Technically: the USD/JPY still needs to test the tops at 112.88 and 113.46 to confirm the current bullish momentum of the pair. On the bearish side, the nearest support levels are currently at 111.60 and 110.80, and the move towards the latter would threaten that the bearish trend might come back.
On the economic data front: The economic agenda for today shows that the focus is going to be on the Federal Reserve’s announcements about the interest rates and monetary policy. Before that, the focus is going to be on the ADP non-farming employment change report and the non-manufacturing ISM index.
