USD/JPY recovery reaches 113.60 ahead of Yellen

The Japanese Yen has recovered momentum on Wednesday, dragging USD/JPY to as low as the 113.30 region although managing to grab some attention afterwards.

USD/JPY all the attention on Yellen

Spot met fresh selling pressure following dovish comments from FOMC’s L.Brainard on Wednesday, suggesting the Fed needs to be more cautious when comes to further tightening in order to clinch its 2% inflation target. Brainard, however, argued that the Fed could start shrinking its balance sheet later this year.

In the same direction, the US-Russia scandal got a boost of oxygen after media reported on Wednesday that Donald Trump Jr. could have acquired damaging information of ex presidential candidate H.Clinton from a Russian lawyer.

The pair came down in tandem with US yields following the above mentioned events, where the 10-year benchmark fell from recent tops near 2.40% to as low as the 2.34% area, where seems to have found some support for the time being

Later in the session, the buck will stay in centre stage in light of the testimony by Chair J.Yellen, seconded by the speech by KC Fed E.George (2019 voter, hawkish) and the Fed’s beige Book.

USD/JPY levels to consider

As of writing the pair is retreating 0.33% at 113.55 and a break below 113.32 (low Jul.12) would aim for 113.16 (23.6% Fibo of the May-June drop) and then 112.29 (21-day sma). On the other hand, the next up barrier emerges at 114.51 (high Jul.12) seconded by 115.51 (high Mar.10) and finally 118.61 (2017 high Jan.3).