Yesterday the USDJPY traded sideways around the 153-yen level with no clear directional bias. Shortly after GMT 11:00, the pair reached a high of 153.53 before pulling back to a low of 152.84 around GMT 15:30. Trading for the day closed at 153.08 yen.

Today the USDJPY saw broad dollar strength following news that U.S. President Trump and the Democrats reached a tentative agreement to avert a government shutdown, combined with growing speculation that hawkish former Fed Governor Warsh will be nominated as the next Fed chair. As of GMT 04:00, the pair is consolidating just below 154 yen.

Looking at the 1-hour chart of the USDJPY (as of GMT 04:20 on January 30), the pair appears to be capped by resistance just below the 154-yen level. A clear break above this level would likely bring 154.50 yen into focus as the next target.

(20-period Bollinger Band, showing ±1 and ±2 standard deviations)

The main economic indicators for today are as follows:

• GMT 13:30 U.S. December Producer Price Index (PPI)
• GMT 13:30 U.S. December Producer Price Index (core PPI excluding food and energy)
• GMT 14:45 U.S. January Chicago Purchasing Managers Index