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Forex pairs in this Article » USD/JPY
FXstreet.com (Barcelona) - The USD/JPY bears were thinking a top had been made at just above 98 last Thursday. Their timing and price was obviously off the mark, but their thought process may not have been that crazy.

Short-term Dollar weakness, not Yen strength is responsible for the drop Friday

The very bullish, taper-talk-induced rally in USD/JPY that was in place last week hit a short-term wall Friday after housing data in the US came in far below expectations and re-established some doubt as to when the Fed would start their tapering program. The decline in the cross Friday caused the USD/JPY to fall short of the next major “correction resistance” level at 99.69. The decline has not yet reached a magnitude that rules out a test of that level, however.

Technical outlook for USD/JPY

The USD/JPY’s long-term outlook is bearish according to technicians. They have the ultimate downside target at 92.53. However, short-term they still are calling for a trading target in the Yen of 99.69 as the current upside correction plays out. Short-term support comes in at 98.06 – the highest closing hourly peak from 8/18 and is backed up by horizontal line support at around 97.
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