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Forex pairs in this Article » USD/JPY (Athens) – The USD/JPY has been trading constantly downwards the last couple of hours mostly due to the rumors that “top China Banks triple debt write-offs as defaults emerges,” as well as on the sharp losses on the Nikkei index.

USD/JPY touched its 200-daily SMA (97.25), on China “woes”, Nikkei fall

The USD/JPY is moving currently under immense pressure as the Asian bourses pared all of their gains in the initial kick off of the Asian trading session due mainly to the China “jitters” pertaining to Chinese banks. Briefly, news wires mention that “China’s biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults,” dragging down immensely the Asian bourses. This, while Nikkei was on the upper level, it closed the session down 1.44%. What’s more, news wires said that risk-on appetite hit the “snooze” button, also due to the fact that “Central Bank of China refrained from adding funds to the market pushing money market rates higher.”

Technical Aspects on the USD/JPY

For the time being, it seems that the USD/JPY is moving at a very congested area but also being supported strongly by the 200-daily SMA (97.25). Earlier, the cross touched at a daily low the 200-daily SMA but immediately rebounded to higher levels. Karen Jones Head Technical Analyst of Commerzbank, mentions that the “USD/JPY no change, the market remains fairly neutral we can work up both bullish and bearish arguments. While we note the 200 day ma at 97.28 guards the current October low at 96.55 and the seven month support line at 95.88. We also note that the Elliott wave count on the 240 minute chart and the 60 minute chart are giving completely different indications and for that reason we consider the chart fairly neutral.”
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