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USD/JPY catches a bid in risk-on Tokyo

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - USD/JPY has opened on the bid in Tokyo and made some headway on the 117 handle, but supply capped the recovery at a high of 117.33. This is in the vicinity of the 100 sma on the hourly chart and a potentially tough area of resistance.

    Meanwhile, there are doubts over the sustainability of the Yen's bid as officials begin to call to end to its rise while it could be damaging on a number of accounts. However, there are many reasons for the Yen to remain strong given the uncertainties in the global economy and especially in China.

    The yuan
    has stabilized of late that might not be able to continue and before long, we are looking at another serious risk-off case. On the other hand, the BoJ's 2% inflation target could be another reason for the Boj to ease further as early as the January meeting and this sentiment should keep a lid on JPY.

    USD/JPY levels

    Technically, Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the Momentum indicator heads south below its 100 level whilst the RSI indicator hovers around 38 as the price holds far below its moving averages, all of which supports a bearish breakout for this Thursday.
    For more information, read our latest forex news.
     

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