13 Feb 2015
Yen could lead the correction in USD – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, explains that USD Index could undergo a correction, and USD/JPY could correct to 117.91 and even 115.50 in the short-run.
Key Quotes
“The Yen was the leader in competitive devaluation and appears more likely to lead the way on the high side now, especially after BOJ’s shocking take on further monetary easing.”
“The US economic data in the recent weeks have consistently missed the market expectations. Moreover, the strong jobs data have already been priced-in by the markets. Thus, Treasury yields could inch lower to 1.85% levels.”
“Moreover, further upside in the yield appears capped around 2.1%, in which case the USD/JPY is unlikely to rise beyond 121.00 levels.”
“Recovery in Crude prices is negative for the USD as most advanced world currencies had weakened in response to weaker crude prices since H2 2014.”
“Thus, the USD/JPY could fall to 117.91 and 115.50 levels in the short-run.”
“On Technical Charts, a weekly closing below 119.00 levels today could be bearish for the pair. The pair could drop sharply to 115.50 levels in the short-term once the 23.6% retracement (105.17-121.83) level of 117.91 is breached.”
"The USD index could fall to the 50-DMA currently located at 92.68 levels. Moreover, a hawkish Bank of England Quarterly Inflation report, and an upbeat Eurozone GDP number is likely to keep USD gains under check."
Key Quotes
“The Yen was the leader in competitive devaluation and appears more likely to lead the way on the high side now, especially after BOJ’s shocking take on further monetary easing.”
“The US economic data in the recent weeks have consistently missed the market expectations. Moreover, the strong jobs data have already been priced-in by the markets. Thus, Treasury yields could inch lower to 1.85% levels.”
“Moreover, further upside in the yield appears capped around 2.1%, in which case the USD/JPY is unlikely to rise beyond 121.00 levels.”
“Recovery in Crude prices is negative for the USD as most advanced world currencies had weakened in response to weaker crude prices since H2 2014.”
“Thus, the USD/JPY could fall to 117.91 and 115.50 levels in the short-run.”
“On Technical Charts, a weekly closing below 119.00 levels today could be bearish for the pair. The pair could drop sharply to 115.50 levels in the short-term once the 23.6% retracement (105.17-121.83) level of 117.91 is breached.”
"The USD index could fall to the 50-DMA currently located at 92.68 levels. Moreover, a hawkish Bank of England Quarterly Inflation report, and an upbeat Eurozone GDP number is likely to keep USD gains under check."