FxWirePro: USD/JPY opens the week on a bullish note, risk-off backs dollar amid pre-Fed jitters

USD/JPY chart - Trading View 

Spot Analysis:

USD/JPY was trading 0.11% higher on the day at 109.77 at around 05:05 GMT, extending Friday's gains.

Previous Week's High/Low: 109.84/ 109.18

Fundamental Overview:

The US dollar extends gains across the board amid robust economic data and souring sentiment. DXY hovers near the five-week high at 90.60. US dollar tracks gains in the US 10-year benchmark yields. 

FOMC meets this week, June 15 and 16, to decide on its monetary policy. Robust economic data raises scope for FOMC to resort to monetary policy normalization sooner than expected.

Meanwhile, at the G-7 meeting, Beijing came under severe criticism over the COVID-19 origin and human rights violations. G-7 countries vowed to launch a ‘democratic’ alternative to China’s Belt and Road initiative to undermine the competition. 

on the other side, the Japanese government decided to lift the COVID-19 restrictions in its three provinces on declined corona cases.

Technical Analysis:

- GMMA indicator shows major and minor trend are bullish

- Price action is above major moving averages and 5-DMA is biased higher

- The pair is trading above daily cloud and Chikou span supports upside

- Stochs and RSI are biased higher, RSI is well above the 50 mark

- Price action has bounced off 21-EMA and major trendline support

Major Support and Resistance Levels:

Support - 109.56 (5-DMA), 109.40 (21-EMA), 108.98 (23.6% Fib)

Resistance - 110.16 (Upper BB), 110.32 (Monthly high), 110.84 (April high)

Summary: USD/JPY opens the week on a bullish note, but pre-Fed jitters likely to keep upside limited. Market participants remain cautious ahead of the FOMC meeting later in the week. Near-term technical bias remains bullish. Weakness only on break below trendline support and daily cloud.