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USD / JPY trapped within a tight range of 109.60-109.90 awaiting the FOMC

  • The USD / JPY has moved sideways within a tight range of 109.60 – 109.00.
  • Markets are looking forward to the release of the FOMC Minutes from the March meeting to find direction.

The USD/JPY It has been moving sideways for the most part since the start of the Asia Pacific session on Wednesday. The pair is currently trading just above the day’s lows at 109.60, near the bottom of its intraday range of 109.60-109.90. To the downside, there is a key area of ​​support around 109.40, with the mid-March highs, March 29 low, and the 21-day moving average coinciding with each other.

Performance of the day

So far it has been an uneventful session in terms of fundamental catalysts. On the data front, US trade figures for the month of February saw the country post another record trade deficit of more than $ 70 billion for the first time. Meanwhile, in terms of the latest on the pandemic, concerns remain regarding the spread of the virus in India, Japan, South Korea and Europe, while UK and EU medical agencies have just released updated guidance. for the AstraZeneca vaccine, with the first claiming that the vaccine is linked to rare blood clots, although the benefits of receiving the vaccine still outweigh the risks.

Given the lack of fundamental catalysts in the session so far, it is not surprising to see that USD / JPY has moved into the range. The pair reflects a broader sense of market indecision; US stocks are closely mixed / flat, the US dollar is mixed against its major counterparts and the DXY flat, while US government bond yields are very modestly lower with 10-year yields just below 1.65. %. The main event of the session, after which markets may find a new direction, is the release of the Minutes from the March FOMC meeting at 19:00 BST.

“The release of the Fed Minutes on Wednesday should provide some indication of the FOMC’s commitment to keeping interest rates at current lows,” says Capital Economics. Other analysts note that a key point of interest will be any reference the Minutes make to the frequency of opinions expressed in favor of tightening policy sooner if the Fed’s current forecasts come to fruition. “If the Minutes beat market expectations of interest rate hikes, then the US dollar could strengthen, putting downward pressure on commodity prices,” Capital Economics comments: Silver is likely, of course , is included in the prices of raw materials that would fall if the Minutes were more aggressive than expected.

Technical levels

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