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Forex pairs in this Article » USD/JPY
FXstreet.com (Barcelona) - The USDJPY has been roiled overnight during a 70-pip drop, culminating in a second tiered- collapse during European trading Tuesday. After the besieged pair bottomed out at 88.62 (intraday minimum), a recovery attempt was subsequently stymied at the 88.90 region, only to pull back once again towards 88.80/82 - where the pair currently resides. At this juncture the cross is incurring a loss of -0.71% off its opening price.

According the Research Analyst Gareth Berry at UBS, "Recent price action provides a reminder though of how vulnerable the USDJPY is once blind faith in the government's desire to weaken the yen is called into question. We still expect USDJPY to remain fairly well supported as the countdown to the January 22nd BoJ policy decision continues - Prime Minister Abe has already pointed to 90.00 as a satisfactory level."

"Dips so far retraced nearly 38.2% of 86.81/89.66 ascent at 88.62, while the prevailing negative tone on hourly chart and 4h indicators descending from the overbought zone that suggest further corrective action for the USDJPY." warns Slobodan Drvenica, an analyst at Windsor Brokers Ltd."

Briefing the technical levels, a penetration through the previous high at 88.40 would risk an extension towards 88.00 (Fib 61.8% and 4h 55-day EMA) - a loss of which would put near-term bulls on hold in favor of stronger reversal of rally from September 2012, notes Drvenica.
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