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USD/JPY recovery capped by 112.50

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 11, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    USD/JPY is about to post the lowest daily close since October 2014 as it trades around 112.15/25, on a volatile day for the Japanese currency that was the best performer supported by risk aversion.

    Greenback managed to move off the lows (110.96) but the recovery remains capped by the 112.50 area. Recently rebounded from 111.50 and rose back above 112.00, but again, as it happened hours ago, it failed to hold above 112.50 and lost strength.

    USD/JPY technical outlook

    According to Valeria Bednarik, Chief Analyst at FXStreet, the risk from a technical perspective remains towards the downside. She notes that 1-hour chart technical indicators remain aiming to resume their declines within bearish territory, following a correction from extreme oversold levels. “In the 4 hours chart, the technical indicators have posted tepid bounces, but remain within oversold readings, giving no signs of a change in the dominant trend”, concluded Bednarik.

    What’s ahead?

    During the week, the pair lost more than 400 pips so far, amid risk aversion. Tomorrow foreign investment data from Japan will be released while in the US the most relevant report will data on retail sales.

    Attention is not likely to lie on the economic numbers. Traders will continue to search for clues about what the Bank of Japan is doing and what could do in the near future. Also, what happens with the stock market and crude oil prices will be relevant and should affect the pair.
    For more information, read our latest forex news.

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