USD/JPY is basically unchanged on the day at 112.55 currently


The dollar index hit the resistance “air pocket” between 95.15 and 95.53 as it touched a high of 95.24 on the day before backing off now – trading at 95.09. That has seen retracements across all dollar pairs, and USD/JPY is one of them as well. The pair touched a high of 112.80 earlier before falling off.

As mentioned, I’d be wary of further gains in the dollar at this point around the resistance “air pocket” but if that gives way I do expect the dollar rally to get some wings. Given the momentum seen so far today, the retracement here feels more like a speed bump for the time being though.

For USD/JPY, the pair moved lower to touch a low of 112.42 on the day as US equity futures also slumped in the last two hours of trading and US Treasuries also trade flat on the session:

Combine the two and that’s pretty much a catalyst for a standstill – which is what we’re seeing now. There isn’t a clear catalyst left on the day since there is no key data to come from US trading, so watch out for the move in US equities later for any indication of a further rally or decline in yen pairs.

As for USD/JPY, keep an eye out on the dollar index too as that will also be a key determining factor on the day.

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