USD/JPY rises above 144.60 after FOMC minutes

USD/JPY jumped above 144.60 after hitting a daily low of 144.07 earlier in the session.
Minutes from the June FOMC meeting revealed that some participants favored a 25 bps hike.
Rising yields made the USD gain traction.

Patricio Martín FXStreet

On Wednesday, the USD/JPY trades higher as the USD gains interest after the Federal Open Market Committee (FOMC) minutes from the June meeting revealed a hawkish stance from its members, with most supporting future rate hikes. In response, the shorter-term US Treasury bond yields rose as markets expect a more aggressive Federal Reserve (Fed) moving forward.

FOMC minutes from June’s meeting reveal a hawkish stance from members

Committee members support the case for hiking interest rates by 25 basis points in the future, according to the FOMC minutes from the latest June meeting – their view shaped predominantly by a tight labour market. The board's ultimate decision was to pause rate hikes, as Jerome Powell considered it necessary to first assess the effects of monetary policy so far on the US economy.

In addition, the minutes revealed that all participants agreed that maintaining a restrictive stance would be appropriate. It's worth noticing that the dot plots in the last monetary policy statement showed that most members see the terminal rate peaking at 5.50% this year, meaning that they foresee an additional 25 bps hike. As a reaction, the reassurance of an aggressive stance by the Fed members fueled the US bond yields, with the 2, 5 and 10-year yields showing gains of 0.50-2% following the release of the minutes.

That being said, investors will eye the release of ADP Employment change data on Thursday and Non-Farm Payrolls on Friday to continue modelling their expectations regarding the next Fed meeting.

USD/JPY Levels to watch

According to the daily chart, the technical outlook for the USD/JPY is bullish in the short term. However, indicators are losing steam, with the Relative Strengh Index (RSI) correcting overbought conditions and the Moving Average Convergence Divergence (MACD) printing decreasing green bars.

Support Levels to watch: 144.00, 143.70,143.30

Resistance Levels to watch: 144.90, 145.00 (psychological mark), 145.07 (June 30 high).

USD/JPY Daily chart

USD/JPY

Overview
Today last price	144.67
Today Daily Change	0.21
Today Daily Change %	0.15
Today daily open	144.46

Trends
Daily SMA20	142.15
Daily SMA50	139.22
Daily SMA100	136.51
Daily SMA200	137.23

Levels
Previous Daily High	144.71
Previous Daily Low	144.21
Previous Weekly High	145.07
Previous Weekly Low	142.94
Previous Monthly High	145.07
Previous Monthly Low	138.43
Daily Fibonacci 38.2%	144.4
Daily Fibonacci 61.8%	144.52
Daily Pivot Point S1	144.21
Daily Pivot Point S2	143.96
Daily Pivot Point S3	143.71
Daily Pivot Point R1	144.71
Daily Pivot Point R2	144.96
Daily Pivot Point R3	145.21

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

EUR/USD stays weak near 1.1850 after dismal German ZEW data

EUR/USD remains in the red near 1.1850 in the European session on Tuesday. A broad US Dollar bullish consolidation combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD holds losees near 1.3600 after weak UK jobs report

GBP/USD is holding moderate losses near the 1.3600 level in Tuesday's European trading. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month. This narrative keeps the Pound Sterling under bearish pressure.

Gold pares intraday losses; keeps the red above $4,900 amid receding safe-haven demand

Gold (XAU/USD) attracts some follow-through selling for the second straight day and dives to over a one-week low, around the $4,858 area, heading into the European session on Tuesday.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.