USD/JPY upside stalled near 111.50, FOMC eyed

The greenback is trading on a better tone vs. its Japanese counterpart on Tuesday, with USD/JPY now visiting the area of session tops in the 111.40/50 band ahead of the NA opening.

USD/JPY bid on firmer USTs

Spot regained the 111.00 barrier and above after dropping to the 110.80 area during overnight trading, always in tandem with the better mood around yields in USTs.

In fact, yields of the US-10 year reference found strong support in sub-2.25% levels earlier today and is currently gaining around 3 bps around the 2.28% handle, while markets are slowly heading towards the FOMC meeting on Wednesday.

The Federal Reserve is expected to keep the Fed Funds target range unchanged at  1.00%-1.25% tomorrow, although without a press conference by Chief Yellen and revised projections (‘dot plot’) the focus of attention shifted to the tone of the statement, where consensus remains pretty divided.

On the opposite side, the BoJ minutes left no room for surprises earlier in the Asian session, with members agreeing to keep the (ultra) easing bias unchanged for the time being.

In the US data space, the S&P/Case-Shiller index is expected ahead of the Conference Board’s consumer confidence for the month of July.

USD/JPY levels to consider

As of writing the pair is gaining 0.27% at 111.40 and faces the initial hurdle at 111.67 (100-day sma) seconded by 111.82 (55-day sma) and finally 112.04 (200-day sma). On the other hand, a break below 110.99 (61.8% Fibo of 108.81-114.51) would aim for 110.60 (low Jul.24) and then 110.16 (76.4% Fibo of 108.81-114.51).