USD/JPY consolidates daily gains, awaits FOMC minutes

The USD/JPY pair is moving sideways in a narrow channel below the daily high of 111.43 as the investors are getting ready for the FOMC minutes. At the moment the pair is up 0.48% at 111.28.

The upsurge seen in the pair during the first few hours of the NA session was fueled by a positive market sentiment and a strong greenback. As of writing, the US Dollar Index was at 100.64 up 0.22% on the day.

• When are the FOMC minutes and how could they affect DXY?

Investors rushed back to stocks on strong U.S. private sector-jobs data. The Nasdaq hit a fresh all-time high while the Dow Jones Industrial Average rose 161 points and the S&P 500 gained 0.68%. According to the latest report by the ADP, U.S. companies added 263,000 workers in March, the most since December 2014, ramping up the expectations for a positive NFP reading on Friday. On the contrary, the weak ISM service sector report was largely ignored.

Technical outlook

Valeria Bednarik, the Chief analyst of FXStreet notes that short term, the 1 hour chart shows that the price is breaking above horizontal 100 and 200 SMAs, whilst technical indicators head north above their mid-lines, supporting further gains ahead. In the 4 hours chart, however, the 100 SMA continues heading lower well above the current level, whilst only the RSI indicator has entered positive territory, adds Bednarik and thinks that the pair needs to advance beyond 112.00 to actually turn bullish, and be able to continue advancing during the following sessions.