USD/JPY weaker around 112.50, ADP on sight

The greenback stays on the downside on Wednesday vs. its G10 peers, dragging USD/JPY to the mid-112.00s, close to daily lows.

USD/JPY attention to ADP, Fed

The softer tone in the pair comes in tandem with the recent decline in US yields, where the 10-year reference retreated to the 2.31% neighbourhood after clinching multi-week tops beyond 2.37% on Monday.

USD came under renewed selling pressure after yesterday’s news cited FOMC’s J.Powell is gaining ground in the run off to lead the Federal Reserve. It is worth mentioning that market participants consider member J.Powell on the dovish side, as opposed to the other front-runner, K.Warsh.

In the US data space, the publication of September’s ADP report will be the salient event later today (125K exp.), seconded by the ISM non-manufacturing, the EIA’s weekly report on US crude oil inventories and the speech by St. Louis Fed J.Bullard (2019 voter, dovish).

USD/JPY levels to consider

As of writing the pair is retreating 0.28% at 112.53 and a breakdown of 112.42 (10-day sma) would open the door to 111.97 (200-day sma) and then 111.71 (61.8% Fibo of 114.51-107.33). On the other hand, the immediate hurdle lines up at 113.19 (high Oct.3) followed by 113.27 (high Sep.27) and finally 113.60 (high Jul.14).