FxWirePro: USD/JPY comatose around 110-EMA, Fed minutes loom

Chart - Courtesy Trading View 

USD/JPY is trading in tight ranges at 110-EMA, with session high at 135.05 and low at 134.55.

Markets remain cautious ahead of the minutes of the Federal Reserve’s February meeting, renewed concerns over more hawkish moves by the Fed keep traders jittery.

U.S. PMIs also read stronger than expected for February, data showed on Tuesday. But housing market was under pressure.

US S&P Global Manufacturing PMI rose to 47.8 from 46.9 prior and versus 47.3 market forecasts while the Services PMI jumped to 50.5 compared to 47.2 expected and 46.8 previous readings. 

Consequently, the S&P Global Composite PMI surpassed 47.5 analysts’ consensus and 46.8 previous reading to mark 50.2 figure.

U.S. Home Sales fall for 12th straight month in January to a seasonally adjusted rate of 4 million, down 0.7% from December and 36.9% from the same month a year earlier, according to the National Association of Realtors. 

The inventory of unsold existing homes rose to 980,000 at the end of January, the equivalent of 2.9 months’ supply.

Stronger-than-expected inflation readings for January, coupled with signs of resilience in the U.S. economy, give the Fed enough headroom to keep raising interest rates.

Focus this week is also on Thursday’s Personal Consumption Expenditures price index reading, which is the Fed’s preferred inflation gauge. The index is expected to have remained relatively high in January.

Technical Analysis:

- USD/JPY capped at 110-EMA from the past many sessions

- Price action is within daily cloud and above 200H MA

- Momentum is bullish and volatility is high and rising

- GMMA indicator shows minor trend is bullish on the daily charts

Major Support Levels: 134.43 (5-DMA), 133.27 (55-EMA)

Major Resistance Levels: 135.81 (Upper BB), 136.99 (200-DMA)

Summary: USD/JPY pivotal at 110-EMA. Technical indicators are tilted to the upside. Watch out for break above 110-EMA for further upside.