Due to the observance of the U.S. Veteran’s Day holiday, today’s forex action has been quiet. Nonetheless, the USD/JPY is showing a bit of life and putting in a 40-pip daily range. As the late-session approaches, rates are entering rotation near the 109.00 handle. This zone has served as a key value area for four of the past five sessions ― will rates settle the day in the neighborhood of 109.00 yet again?

At press time (2:15 PM EST), the answer to that question appears to be yes. Participation is limited as many liquidity providers have taken leave of the office. However, the action is due to pick up during the early U.S. overnight session. Japan’s Money Supply (YoY, Oct.) report is due out shortly after today’s Wall Street closing bell. Industry experts expect the number to come in at 2.6%, up from the previous release of 2.4%. While this figure is a secondary market mover, it will shed some light upon the impact that the dovish BoJ policy is having on potential inflation. 

All in all, the USD/JPY has been trending north since the beginning of October. Let’s dig into the daily technicals and see if the intermediate-term strength is poised to continue.

USD/JPY: Technical Outlook

On the daily timeframe, the USD/JPY is hanging tough in bullish territory. Exchange rates are firmly above support and not too far off the 109.00 psychological barrier.

Here are the levels to watch going into the Tuesday session:

• Resistance(1): Double Top, 109.47-48
• Support(1): Daily SMA, 108.79
• Support(2): 108.56 

Overview: Be on the lookout for the USD/JPY and most other markets to go extremely quiet as the U.S. session grinds to a close. Upon institutional money returning in force tomorrow, the action is likely to pick up considerably. For now, the best approach may be to take a seat on the sidelines and wait for the markets to return to full strength.