USD/JPY stalls ahead of FOMC

USD/JPY opened in Asia 118.89 after being only USD pairing not to fall Tuesday
• Higher USD Treasury yields underpinned USD/JPY amid broad USD weakness ahead of FOMC statement today
• Tokyo holiday ensured little or no price action/turnover with 118.76/89 range
• JPY appears to have regained the role as funding ccy for carry trades
• Hourly support has formed around 118.75 with stops eyed below 118.50

EUR/USD opened in Asia at 1.0980 after gaining 0.80% on broad USD weakness
• It was a very quiet Asian session with EUR/USD trading in 1.0966/81 range
• The USD made a small recovery against risk ccys as risk assets eased
• EUR/USD sellers are lined up above 1.1000 while buyers tipped around 1.0960
• German Inflation and EZ Sentiment data today, but key events in US
• US Q1 GDP will be followed by FOMC decision/statement

AUD/USD opened on Wednesday at 0.8024 and traded a 0.7988-0.8026 rg in Asia
• DXY down 0.7% Tues; AUD/USD up 2.0%; AUD crosses up 1.1% to 1.9%
• Five upcoming c/b meetings over next two days could create waves for AUD
• Nothing fundamentally changed for AUD/USD – just massive short covering
• May rate cut odds up to 58% from 49% due to elevated AUD (PW)

NZD/USD opened on Wednesday at 0.7722 and traded a 0.7700-37 range in Asia
• NZD/USD a mirror albeit lagging image of AUD/USD as p/t sets in
• DXY fell 0.7% Tues; AUD/USD up 2.0% and NZD/USD up 0.95%
• Long USD positions mostly flushed ahead of FOMC and RBNZ meets
• Mkt fully aware now RBNZ has adopted a soft easing bias
• Anything less from RBNZ cld see NZD rally hard especially agst AUD (PW)

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Source:: USD/JPY stalls ahead of FOMC

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