USD/JPY intermarket: mild risk-appetite ahead of FOMC supportive

Currently, USD/JPY is trading at 111.61, up 0.47% on the day, having posted a daily high at 111.70 and low at 110.83.

USD/JPY has been embarking on a break of the descending resistance of the 11th July double top in an environment of mild risk appetite. The US benchmarks are higher and the S&P 500 has made a fresh record high today at 2,480.15 on the back of better-than-expected results from bellwether companies.

FOMC meeting: market will listen only to what it wants to hear

Spreads also remain a dominant driver for JPY and the US ten year is above the 2.30% mark up + 2.76% at 2.3175 at the time of writing having scored a high of 2.3211%. However, analysts at Scotiabank note that risk is elevated into the FOMC’s two-day meeting as market participants assess balance sheet plans and consider the implications for long-term yields.  

USD/JPY levels

"Above 114.50 will see an extension to the 115.51/62, this year's highs," suggested analysts at Commerzbank, adding, "initial minor resistance lies circa 112.50/75." 110.00, (the location of the 250-day ma), is an area of demand if this flips back to the defensive. "The 55-week ma at 109.65, below here, there is scope for slippage to the 108.13 April low," added the analysts at Commerzbank.