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USD/JPY makes fresh lows, FOMC & Nikkei 225 weigh

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The main theme in Asia continues to be USD weakness, which coupled with a sell-off in the Nikkei 225 during afternoon trade, now up just 0.63%, has seen the Yen strengthen further, breaking through the mid-round number at 112.50, setting its sights now (broken as lines being typed) towards the FOMC-led low at 112.33.

    BOJ inaction, dovish FOMC double-whammy for sellers

    The combination of no additional policy action by the Bank of Japan last Tuesday - despite expectations for further negative rates remain solid -, together with a dovish FOMC outcome on Wednesday, have been two powerful trigger to see the pair abandon the top-edge of its daily range at 114.00 and now be decisively headed towards the lower end of mentioned range circa 112.00.

    USD/JPY key levels

    Technically, should bears manage to take out the 112.33 Wed's low, the 112.00 will come into focus, with a break lower setting the stage for a potential retest of this year's low in the 111.00 vicinity. On the upside, there are no prospects of bulls gaining the upper hand unless 113.00 can be re-taken; only then, the scenario may start to paint a more constructive picture.
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