USD/JPY consolidating the Trump rally highs

Currently, USD/JPY is trading at 111.92, down -0.16% on the day, having posted a daily high at 112.17 and low at 111.62.

USD/JPY has been consolidating the bid and Trump rally that took the major to the highest levels since Feb earlier this year at 113.88. Markets are starting to buy back into US treasuries at attractive yields and thus the 10yr was falling from 2.41% to 2.35% and the 2yr yield fell from 1.17% to 1.12% overnight. For the day ahead, while data is light to start the week, we have key events taking place tonight in GDP Q3 in the US shift ahead of nonfarm payrolls at the end of the week and both will be key going into the month of Dec and the FOMC's final meeting for the year. The Fed funds futures continued to imply a 100% chance of a rate hike in December.

"While financial markets might be starting to look for new drivers, politicians and policymakers are now very much in the driver’s seat. Financial markets are going to have to get used to decisions and policies taking longer to be negotiated and finalised compared with central banks," explained analysts at ANZ who also noted that the FOMC will need to see what actual US fiscal policies are before assessing the impact on interest rate profiles. 

Global markets outlook - ANZ

USD/JPY levels

Spot is presently trading at 111.91, and next resistance can be seen at 112.10 (Daily Open), 112.17 (Daily High), 112.21 (Hourly 20 EMA), 112.41 (Weekly Classic PP) and 112.41 (Hourly 100 SMA). Support below can be found at 111.81 (Daily Classic S2), 111.62 (Daily Low), 111.34 (Yesterday's Low), 111.32 (Hourly 200 SMA) and 111.08 (Daily Classic S3).