The USD has attracted some bidders today, posting gains across the majors. One of the largest has been against the Japanese yen, with rates of the USD/JPY rallying more than 50 pips. The daily bullish breakout has brought several topside resistance levels into view.

Aside from the EIA Crude Oil Stocks Report, Wednesday’s U.S. forex session will be dominated by the U.K. Brexit votes.  In addition, key events scheduled for the coming U.S. overnight include the RBNZ Interest Rate Decision and a speech from ECB President Mario Draghi.

A Selling Opportunity In The USD/JPY?

With a lack of fundamentals influencing the U.S. dollar or Japanese yen until Thursday’s U.S. Q4 GDP release, a sell from topside resistance may come to pass. If this market continues to grind north, shorting the Daily SMA (111.00) isn’t a bad way to get in on the action.

Bottom Line: Until the Thursday U.S. session, I will have sell orders queued up from 110.94 in the USD/JPY. With an initial stop loss at 111.26, this trade produces a tidy 25 pips on a sub-1:1 risk vs reward management plan.

From a macro perspective, the bulk of Wednesday’s forex action is likely to reside in the GBP/USD and USD/CAD. With oil inventories set to come out and U.K. Parliamentary votes dominating headlines, traders are likely to focus on the GBP and CAD. Be on the lookout for heavy volatility in these two currencies. Commodity pricing and political uncertainty will undoubtedly rule the forex session.