USD/JPY drops back to recent range after hitting fresh 6-week highs
- US Dollar retreats across the board as crude oil drops sharply.
- USD/JPY off highs but still on top of 108.00, losing momentum.
The USD/JPY pair spiked to 108.35, reaching the highest intraday level since August 1st and then pulled back to the 108.15/20 area. Since the Asian session price has been hovering around the mentioned level.
It remains practically flat for the day and still near monthly highs despite the retreat of the US Dollar across the board. Over the last hour, the greenback hit fresh lows against the Euro, the Pound and some emerging market currencies. The DXY stands at the daily low at 98.33, down 0.30%.
The USD/JPY held in the recent range unaffected by better-than-expected US data and not even by lower US yields. Industrial production rose 0.6% in August above the 0.2% of market consensus. The 10-year yield dropped to 1.81%.
Price action remains limited despite the volatility in crude oil and ahead of the FOMC decision. Tomorrow at 18:00 the Federal Reserve will announce probably another rate cut. If the central bank moves as expected, analysts will look for clues about the next moves.
Technical outlook
The pair still holds a bullish tone as it remains above 108.00 (also the 20-SMA in four hours chart) but the momentum eased significantly. The greenback needs to break cleary on top of 108.30 to resume the upside while below 108.00, more losses should be expected.