USD/JPY inching closer to multi-month highs ahead of US data and FOMC minutes

The USD/JPY pair extended range bound price action and is now challenging daily tops ahead of US economic releases. 

Currently trading around 111.20-25 region, within striking distance of multi-month highs touched in the previous two sessions, the pair managed to recover early minor losses to 5-day SMA. Even weaker sentiment around European equity markets has failed to benefit the Japanese Yen's safe-haven appeal, clearly pointing to the prevalent bullish sentiment surrounding the pair on growing expectations of an eventual Fed rate-hike action. 

Hence, market participants will remain focused on today's FOMC meeting minutes, which although is expected to reaffirm market expectations of December Fed rate-hike action, would still be scrutinized for clues over the central bank's rate tightening cycle and might provide fresh impetus for the pair's near-term direction. 

In the meantime, US economic releases - durable goods orders, weekly jobless claims, new home sales, and UoM consumer sentiment index, would also be looked upon for short-term momentum play.

Technical outlook

Pointing to the near-term bullish set-up, Yann Quelenn, Market Analyst at Swissquote Bank SA, notes, ""USD/JPY's bullish momentum has paused forming resistance above 111. Hourly resistance is given at 111.18 (21/11/2016 high). Support is given around 109.80 (16/11/2016 low). Stronger support lies at 108.56 (17/11/2016 low). Expected to see further upside moves."

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