JPY Trading Outlook (20-06-2014)

USD/JPY As the NorAm trading day wears down, USD/JPY’s only managed a 25 pt range, the bulk of it guided by the lingering, post FOMC Tsy yield drop o/n followed by a big rebound ahead of today’s 30-yr TIPS auction and after better-than-expected US Claims, Philly Fed and LEI results. Wed’s reaction to the Fed dots was to some extent a squaring up of positions premised on a more hawkish total result. USD/JPY found support in NY ahead of this week’s lows and the 200-DMA, while the day’s 102.00 high is right at the daily Cloud base, that after Wed’s long wick rejection inside of the Cloud. Today’s rebound in Tsy yields may have helped USD/JPY recover, but it trimmed gain in some of the higher beta crosses, though a post-FOMC surge in the Nikkei plays into the risk-on/yen-off carry-trade pattern. Rising commodity prices also helping some of those trades, though a surge in oil on ME or Russian supply fears could cut against risk if it were to become too pronounced. Obama confirmed the US would lend some military support to Iraq, potentially upping ante there. EUR/JPY’s rise ran into 200-DMA, Tenkan, Kijun & 50% Fibo resistance by 138.90 as expected.