Contrary to expectations, USD/JPY was driven by moderate upside momentum that lead to the US Dollar for an appreciation up to 112.40 against the Yen on Tuesday. Subsequently, the pair returned near the 20-hour SMA circa 112.10. By and large, technical indicators suggest further upside potential until the 113.00 mark where an intermediate down-trend on the daily chart is located. In case of strong upside momentum, the rate may likewise test the monthly R1 at 113.36. On the contrary, political uncertainty in the US may weight heavily on the Greenback, thus pushing it down to a support cluster formed by the monthly PP and the 55-hour SMA near 111.80. In terms of fundamentals, BOJ’s Governor Kuroda is due to participate in a panel discussion at the ECB Forum at 1330 GMT.
