USD/JPY: Revisits FOMC-Led Supply Imbalance

A renewed impetus in the exchange rate is well and truly alive after a fundamentally-led adjustment in the price, resulting in a fast auction into 111.45-50, where bids meet the origin of a strong supply imbalance dating back March 20th, time when the FOMC admitted a surprisingly dovish stance. Judging by technicals and intermarket flows, the pressure is definitely building up for the market to find a higher equilibrium as bids into the USD keep gathering in congruence with the renewed bullish dynamics across equities, fixed income and the DXY, all endorsing higher levels. Be aware, in terms of risk reward, if trading intraday, 111.45-50 also represents the 100% proj level from the latest measured move taking as reference the previous swing low through the breakout point. Any strategy looking to capitalize on the ongoing bullish momentum would find better levels to engage starting at 111.15-20 (resistance-turned-support), followed by the 111.00 (POC Monday) ahead of 110.85. Commanding the uptrend traders can now find further comfort in the form of a multiple trendlines. Adding to the bullish case going forward, the latest bull cycle has now extended over 138p, as opposed to the first impulsive move up off the bottom, worth only 98p. What this means is that the market structure is developing with the right traits of magnitude to find draw further buying interest.