USD/JPY holds steady in recovery despite Q4 GDP

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    USD/JPY has been showing little reaction to the GDP data for Q4 that arrived at -0.4% q/q vs expectations of -0.2%.

    Meanwhile, USD/JPY has bee recovering of late with some better data out of the US, despite Yellen's dovish, but cautiously optimistic rhetoric last week. Markets are concerned that the BoJ will intervene, adding to the support in the major last week, " explained Valeria Bednarik, chief analyst at FXStreet.

    For the day ahead, we now await the return of full markets with China coming back into the mix and offering the trade balance for January straight off the bat. Further into the week, we will have Chinese CPI's and the FOMC minutes.

    Technically, USD/JPY's downside is compelling below the 116.00 strong hold which is now key resistance. Valeria Bednarik, chief analyst at FXStreet suggested that, in the 4 hours chart, the technical indicators have corrected oversold readings, however, noting that the RSI indicator has lost its upward strength around 44.

    "Whilst the price develops well below its moving averages, indicating limited buying interest at the current levels. Former lows in the 114.20 region provide a critical resistance for the upcoming days, as it will take a steep recovery above it to confirm an interim bottom has taken place."

    Meanwhile, the market trades above the pivot of 112.83 with S1 at 112.12 protecting S3 at 110.23 as a key level to the downside.
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