9 Aug 2013
USD/JPY cascades down to 95.88 support and rebounds
FXstreet.com (Barcelona) - The USD/JPY finally hit some meaningful support Thursday just as the cross was reaching extreme oversold levels – a perfect spot for a relief rally.
The intuitive trade has not rewarded traders – perhaps that changes for a bit
Decent economic data out of the US, members of the Federal Reserve and FOMC chatting up “tapering” plans, and word Thursday night that the Bank of Japan will be continuing their current stimulative monetary policies for the foreseeable future. What would the natural prediction be for the USD/JPY? Higher, right?
Well until 15:00 GMT Thursday, the USD/JPY was going anywhere but higher. The cross, however, did commence a sharp rally at around 95.80 – a slight undercut of the technicians’ projected support of 95.88. The session ended with USD/JPY trading at 96.70 and the cross is currently trading at 96.72. Will the rally get legs?
USD/JPY technical outlook
Technicians were expecting the current bounce in the USD/JPY, but they are of the opinion that this move higher is merely corrective in nature. They foresee a short-term peak being made at either 97.00 or 97.73 which is theoretically going to be followed by a retest of Thursday’s lows. First support now comes in at the Thursday low of 95.80 and is followed by the 6/14 close at 94.15. A potential ceiling for USD/JPY comes in at one of the Fibonacci retracement-generated resistance lines at 97 and 97.73.
The intuitive trade has not rewarded traders – perhaps that changes for a bit
Decent economic data out of the US, members of the Federal Reserve and FOMC chatting up “tapering” plans, and word Thursday night that the Bank of Japan will be continuing their current stimulative monetary policies for the foreseeable future. What would the natural prediction be for the USD/JPY? Higher, right?
Well until 15:00 GMT Thursday, the USD/JPY was going anywhere but higher. The cross, however, did commence a sharp rally at around 95.80 – a slight undercut of the technicians’ projected support of 95.88. The session ended with USD/JPY trading at 96.70 and the cross is currently trading at 96.72. Will the rally get legs?
USD/JPY technical outlook
Technicians were expecting the current bounce in the USD/JPY, but they are of the opinion that this move higher is merely corrective in nature. They foresee a short-term peak being made at either 97.00 or 97.73 which is theoretically going to be followed by a retest of Thursday’s lows. First support now comes in at the Thursday low of 95.80 and is followed by the 6/14 close at 94.15. A potential ceiling for USD/JPY comes in at one of the Fibonacci retracement-generated resistance lines at 97 and 97.73.