USD/JPY: bullish, testing 112 handle ahead of FOMC outcome

Currently, USD/JPY is trading at 112.02, up 0.12% on the day, having posted a daily high at 112.10 and low at 111.83.

USD/JPY is up to challenge the 112 handle with risk on markets overnight following through in Tokyo ahead of key risk events in the Aussie CPI data and FOMC meeting outcome (not regarded as a live meeting in the sense no amendments are expected from the Fed). Overnight, US interest rates, most commodities, and equities all rose with Wall Street making fresh record highs in the S&P500 on decent earnings.

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

USD/JPY rose from 110.80 to 111.94 overnight highs with US 10yr treasury yields up from 2.25% to 2.33%. The Fed fund futures yields edged higher while markets remain confident that a rate hike will not come until December. Yield speed between Japan and the US remains a major factor for USD/JPY.

USD/JPY levels

USDJPY: Mildly Bullish

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair presents a bullish stance, given that in the 4 hours chart, the price is developing above the 50% retracement of its June/July rally at 111.560 - " . . . the immediate support, whilst technical indicators advance within positive territory, supporting another leg higher," Bednarik added.