USD/JPY inches higher above 112, FOMC on sight
After spending the Asian and the European sessions consolidating below the 112 handle, the USD/JPY pair gathered some bullish momentum in the NA trading hours and rose to a fresh session high at 112.12. As of writing, the pair was trading at 112.03, up 0.22% on the day.
A recent increase witnessed in the US Dollar Index seems to be the main reason behind the pair's rise. At the moment, the DXY is at 97.32, up 0.04% on the day. However, this move hasn't been backed by a fundamental catalyst and is unlikely to sustain, especially before the FOMC releases the minutes from its May meeting at 18 GMT.
- When are the FOMC minutes and how could they affect DXY?
On the other hand, the major equity indexes in the U.S. started the day higher on Wednesday, suggesting an overall positive market sentiment and making it difficult for the safe JPY to gain strength against the USD. The Dow Jones Industrial Average is gaining 32 points, and the S&P 500 Index is up 0.04% at the moment. Nevertheless, the risk appetite is subject to change as well and investors will be waiting for the FOMC before jumping on the bandwagon.
- US stocks slightly higher as investors keenly await FOMC minutes
Technical levels to watch
112.15 (100-DMA) could be seen as the immediate hurdle for the pair ahead of 112.55 (20-DMA) and 113 (psychological level). To the downside, supports align at 111.25 (200-DMA), 110.85 (May 22 low) and 110.25 (May 18 low).
- USD/JPY neutral, likely between 110.20/113.10 – UOB