BUZZ-COMMENT-Dollar basing vs yen, but upside may be limited pre-Fed, BOJ
April 22 (Reuters) - USD/JPY rose slightly on Thursday after again holding just above key support at 107.77 , with the dollar gaining after U.S. data and the ECB meeting but constrained ahead of next week's Fed and BOJ gatherings.
There's room for a rebound while above the 38.2% Fibo of 2021's recovery at 107.77, but resistance from falling moving averages, the tenkan and kijun lines and the down trend-line across April 5 and 13 highs is making it difficult to retake the broken 23.6% Fibo at 109.
USD/JPY is highly positively correlated to the dollar index, which is also recovering from this month's tumble to the 61.8% Fibo of this year's recovery, possibly with room to retrace more .
Claims and Chicago Fed data extended the run of mostly better-than-forecast U.S. data this month. Even though existing home sales unexpectedly fell , they remain above the post-GFC and pre-pandemic peak, constrained by tight supplies and surging prices.
Neither the Fed nor the BOJ are expected to make substantive policy changes next week, but the current $6.68bln net spec USD/JPY long position remains a weight unless Treasury yields resume Q1's advance.
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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.