USD/JPY flirting with highs near 113.70 ahead of FOMC

The greenback is now gathering further traction vs. its Japanese peer on Wednesday, sending USD/JPY to the area of daily tops near 113.70.

USD/JPY bid after US data

Spot met extra upside pressure after US ADP report showed the private sector has created 246K jobs during January, surpassing expectations for 165K and up from December’s 151K (revised from 153K).

In the meantime, the pair is recovering after quite a negative start of the week, including yesterday’s test of fresh lows in the 112.00 neighbourhood after President D.Trump once again talked down the buck.

Today’s up move in spot has been largely backed by rising yields in the US money markets, particularly the 10-year benchmark piercing the 2.49% mark earlier.

USD/JPY levels to consider

As of writing the pair is advancing 0.71% at 113.70 facing the next resistance at 113.97 (high Jan.31) followed by 114.47 (20-day sma) and finally 114.86 (55-day sma). On the flip side, a break below 112.04 (low Jan.31) would aim for 111.98 (38.2% Fibo of the November-December 2015 up move) and then 111.32 (low Nov.28).