USD/JPY keeps 3-month tops near 109.90 ahead of FOMC

• The pair looks for direction in the upper end of the range near 109.90.
• US 10-year yields flirting with highs near 3.0% level.
• US ADP report coming up next ahead of the FOMC meeting.

The greenback is alternating gains with losses vs. its Japanese counterpart on Wednesday, taking USD/JPY to the 109.85/90 band ahead of the NA open.

USD/JPY looks to yields, FOMC

The pair is challenging recent tops in the boundaries of the critical barrier at 110.00 the figure today, or 3-month peaks, facing the immediate hurdle at 110.24, coincident with the key 200-day sma ahead of February tops in the mid-110.00s.

The up move in spot echoes the performance of yields of the key US-10 year benchmark, which have returned to the boundaries of the 3.0% level albeit a break above this level remains elusive for the time being.

In the data space, the ADP report is expected at 200K for the month of April, while the FOMC is seen leaving rates unchanged at today’s meeting. Consensus among traders sees the Committee could deliver another rate hike at the June meeting.

USD/JPY levels to consider

As of writing the pair is losing 0.02% at 109.84 and a break below 108.94 (10-day sma) would expose 107.96 (21-day sma) and finally 106.86 (low Apr.17). On the upside, the immediate hurdle is located at 109.92 (high May 1) followed by 110.24 (200-day sma) and then 110.48 (high Feb.2).