USD/JPY remains strong, near weekly highs around 106.00

• Dollar posts mix results across the board ahead of FOMC minutes.
• Yen remains under pressure as equity prices rise in Wall Street.

The USD/JPY is holding onto daily gains supported by a recovery in risk appetite. Earlier on Wednesday, the pair rose to 106.10, reaching the highest level in three weeks and then pulled back finding support at 105.85. As of writing, it trades at 106.00, on its way to the highest close in almost a month.

US President Trump signalled the possibility of fiscal stimulus measures and triggered a rebound in Wall Street after the sharp decline on Tuesday after he cancelled talks with Democrats.

The Dow Jones is rising 1.55%, and the Nasdaq gains 1.33%. US yields are also higher supporting the rally in USD/JPY. The US 10-year stands at 0.775%, near the weekly highs. Market participants now await the FOMC minutes from the latest meeting that will be released at 18:00 GMT.

Technical outlook

The USD/JPY is consolidating above a key technical resistance and also above a downtrend line. The short-term bias is starting to favor the upside. The next resistance level is seen at the 106.05/10 area followed by 106.30 and 106.55. On the flip side, the immediate support is now seen at 105.75/80. A slide under 105.50 would increase the bearish pressure.

Technical levels