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The Friday night range was 154.35 - 155.49, Asia is currently trading around 155.30. The pair tried lower once more but again found strong demand just below the 154.50 area. The market is pricing in the fact that the Yen move looks like it could force the BOJ into action in December. This has stalled the upward momentum and could keep it contained in the short-term but I suspect the market will still look for opportunities to express a long USD at the right levels. Technically USD/JPY is still in an uptrend with the first big support back toward the 153-155 area which should see buyers reemerge. In today's Asian session I suspect we will continue to consolidate within a wider 154.50-156.00 range. The FOMC later this week could be the catalyst to get this pair moving again as it could potentially be meaningful for the USD direction going into the year-end.

• MNI POLICY: Concerns Grow Over Takaichi's BOJ Board Picks. Bank of Japan officials are concerned that Prime Minister Sanae Takaichi may nominate a reflationary successor to board member Asahi Noguchi, whose term ends on March 31, in a manner reminiscent of her mentor, former Prime Minister Shinzo Abe, who selected like-minded policymakers during his tenure, MNI understands
• (Bloomberg) - Market pricing for the Fed has turned very dovish the past few weeks, skewing risks to a hawkish surprise. The market has moved to price a 25-bp cut next week as almost guaranteed, with the increasing prospect of Kevin Hassett as the next Fed Chair and a terminal rate of 3%.
• Options : Close significant option expiries for NY cut, based on DTCC data: 155.00($1.33b), 156.00($1.49b). Upcoming Close Strikes : 155.00($877m Dec 11), 156.00($880m Dec 10), 156.00($1.24b Dec 11) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 85 Points
• Data/Event : Labor Cash Earnings, GDP, BoP Current Account Balance

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range Friday night of 0.5763 - 0.5787, Asia is trading around 0.5780. The NZD continued to consolidate above 0.5750 in a quiet Friday session. On the day, look for support now back toward the 0.5735-0.5755 area as the focus turns back to the more important 0.5800-50 resistance where I suspect sellers could return initially. The FOMC this week will have important implications for the USD so the market will be gearing up for that event.

• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5670(NZD382m), 0.5730(NZD767m). Upcoming Close Strikes : 0.5700(NZD557m Dec 10) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 33 Points

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The AUD/USD had a range Friday night of 0.6622-0.6649, Asia is trading around 0.6635. The AUD pushed through the 0.6630 area, it has consolidated above there but without really building on this break. The AUD price action remains very constructive and indicative of a market with solid buying interest. While the AUD remains above 0.6500-0.6550 I suspect dips should continue to be supported. In the Asian session, look to see if the AUD can hold above this 0.6620/30 area. It has come a long way so if this does not hold we could see a pullback, first support below that is toward 0.6570/90 where we should see demand reappear. Ultimately the AUD is looking to rebuild momentum to have another look back toward the 0.6700 area at some point. RBA tomorrow and the FOMC later this week should dictate price action coming up.

• MNI - The RBA decision is announced tomorrow and rates are highly likely to be left at 3.6%. With the outcome widely expected, the tone of the statement and press conference will be scrutinised and given the strength of the data since the last meeting, there is a risk that the bank will sound more hawkish. The market has a 25bp hike priced in by August. October underlying CPI inflation printed at 3.3% and while Q3 GDP was below consensus, domestic demand was very strong rising 1.2% q/q. Governor Bullock said that while the output gap size is uncertain, it probably has closed, which increases risks to inflation from stronger demand. Thus, rates are likely on hold for some time.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6475(AUD814m), 0.6500(AUD342m). Upcoming Close Strikes : 0.6550(AUD1.59b Dec 11) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 35 Points
• Data/Event: Foreign Reserves.

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P