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Forex pairs in this Article » USD/JPY (Athens)- The USD/JPY after the yesterday’s sharp sell off on “no-taper” FOMC decision, it now seems to have digested the result and regaining uptrend momentum.

USD/JPY at its daily highs as markets seem to have digested FOMC results

The USD/JPY was heavily wounded yesterday on “no-taper” news, while the vast majority of traders have priced in the markets even a “lite-tapering” of 5-10 billions accompanied with some additional forward guidance. Investors were caught off guard after the FOMC result, as the news fuelled a sharp sell off the greenback, taking the risk sentiment in “on” button. Today, we are ahead a relatively quiet Asian market day, as Chinese markets are closed on both Thursday and Friday due to the mid-Autumn festival (the Hong Kong Stock Exchange is shut on Friday only). On the other hand, we are ahead of crucial US data, i.e. Philly Fed and existing home sales, with the latter one to be very important especially after the yesterday’s US housing dismal releases.

Technical Outlook and Strategic Bias on USD/JPY

Karen Jones, Head Technical Analyst at Commerzbank suggests that the “USD/JPY our view remains neutral to positive. Last week the market stalled at 100.62 and is seeing a minor correction lower. We have minor support at 98.25. The upside bias remains above the 97.26 support line, but ideally we should now see dips hold the cloud support at 98.27/97.64. Our initial upside target is the 101.54/60 July high and the Fibonacci retracement, with a long term Fibonacci retracement offering a 105.48resistance point above here. Below 97.26 we would revert to neutral as the risk will increase of further slippage to the 200 day ma at 95.65.”
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