The greenback was trading flattish on Tuesday morning and the USDJPY pair was hovering around the 107 mark, unchanged on the day.
Later in the session, durable goods orders are due and should decline notably to -2.4% from 2.8% previously. Additionally, the core indicator is projected to slow from 0.7% to 0.4%. This could be dollar negative.
However, the most focus will be on today’s new Fed chair first public appearance as Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC. His remarks might bring some very big movements on the financial markets as he could sound a bit hawkish, calling for more than three rate hikes in this year. Should this happen, US bonds could be hit and stocks might plunge. The greenback failed to appreciate since the Fed started to hike rates and therefore the impact might be neutral.
The USDJPY pair is now facing some stronger resistance of previous highs and lows, seen at 107.30, 107.80/108.00 and eventually at 108.50. As long as the greenback remains below these zones, the medium-term trend seems bearish.
Bulls will try to defend the short-term bullish trend line near 106.60 and if not held, the US dollar might deteriorate to the previous cycle lows at 105.50. In all cases we strongly recommend to have rigorous money and risk management.
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