USD/JPY ends week higher and far from lows

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Córdoba) - USD/JPY not only erased losses but is about to end the week with a gain of almost 200 pips. The pair during the week reached the lowest level in a year at 115.94 but then reversed sharply and near the end of trading is holding near 119.00.

    The pair peaked on Friday, during the American session at 118.79, the highest level in two weeks. It was holding near the top, still with bullish momentum, supported by a recovery in stocks and by the US dollar. Greenback strengthened in the currency market during the second half of the day.

    USD/JPY bottomed?

    The US dollar not only rose sharply from the lows but also broke last week highs and climbed above the 20-day moving average. From a technical perspective, a short-term bottom could have been reached. The main trend continues to favor the yen and the USD/JPY could face strong resistance around current levels, that during most of last year worked as a support area.

    For the pair to recover or to avoid falling into new lows it may need that risk appetite remains in place or at least that equities and crude oil consolidate in the coming days. So far the correction that took place during Thursday and Friday across financial markets was not based on an improvement in global fundamentals.
    For more information, read our latest forex news.

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