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USD/JPY: testing the 20 sma on recovery attempt

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 24, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    USD/JPY is on the way to the 20 sma on the hourly chart in a recovery from the recent lows instigated yesterday/overnight on comments from the Japanese authorities.

    As noted by analysts at Scotiabank, BoJ Gov. Kuroda said the central bank will not target the JPY, and that lead to further downside in USD/JPY along with soggy Asian equities.

    The data in the US today has also disappointing in markit services and housing stats all missing expectations. We await Fed's Bullard later today and Japanese CPI's tomorrow. Until markets can gather some traction, the uncertainties will continue to support the Yen. However, for now, the greenback is gathering some pace and Fed's Kaplan is supporting this move with comments suggesting that the US will not enter a recession this year.

    USD/JPY levels

    USD/JPY is in a strong bear trend with momentum that is evident across the short, medium and longer-term DMI oscillator studies, as noted by analysts at Scoatiabank.

    "This suggests little or no prospect of a significant JPY retreat at this stage and continued pressure on USDJPY to retest (at least) the 111 area. Negative, longer –term signals suggest downside risks may extend to 106.50 (38.2% retracement of the 2011/2015 rally)."
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