25 Aug 2015
USD/JPY jumps to 120.40 on PBOC intervention
FXStreet (Mumbai) - The US dollar was unstoppable and jolted higher versus its Japanese counterpart in the mid-European session, lifting USD/JPY beyond 120 barrier, as the latest PBOC move calmed China worries which added to the prevailing risk-on sentiment.
USD/JPY back above 120
Currently, the USD/JPY pair trades nearly 1.5% higher at 120.20, spiking to 120.39 highs after the PBOC rate cut announcement. The major rallied nearly 40 pips after the greenback received fresh impetus from the Chinese central bank’s latest effort to boost its dwindling economy.
The People’s Bank of China (PBoC), the country's central bank, reduced benchmark interest rates by 0.25% on Tuesday, reacting to massive turbulence in local Chinese as well as global stock markets.
The PBOC reduced the one-year lending rate to 4.6%, and the one-year deposit rate to 1.75%.The central bank also lowered the Reserve Requirement Ratio (RRR) by 0.5%.
Markets across the world reacted positively, with the US dollar benefitting the most from the increased risk-on market profile. The US dollar index, a virtual gauge of greenback’s relative strength, now trades 0.64% higher at 94 levels.
Later in the session, services PMI, consumer confidence and new home sales from the US are due, which may lead the direction for further USD moves.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.39 (Today’s High)) levels and above which it could extend gains 120.80 levels. To the downside immediate support might be located at 118.86 (Today’s Low) below that at 118.30 (March levels).
USD/JPY back above 120
Currently, the USD/JPY pair trades nearly 1.5% higher at 120.20, spiking to 120.39 highs after the PBOC rate cut announcement. The major rallied nearly 40 pips after the greenback received fresh impetus from the Chinese central bank’s latest effort to boost its dwindling economy.
The People’s Bank of China (PBoC), the country's central bank, reduced benchmark interest rates by 0.25% on Tuesday, reacting to massive turbulence in local Chinese as well as global stock markets.
The PBOC reduced the one-year lending rate to 4.6%, and the one-year deposit rate to 1.75%.The central bank also lowered the Reserve Requirement Ratio (RRR) by 0.5%.
Markets across the world reacted positively, with the US dollar benefitting the most from the increased risk-on market profile. The US dollar index, a virtual gauge of greenback’s relative strength, now trades 0.64% higher at 94 levels.
Later in the session, services PMI, consumer confidence and new home sales from the US are due, which may lead the direction for further USD moves.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.39 (Today’s High)) levels and above which it could extend gains 120.80 levels. To the downside immediate support might be located at 118.86 (Today’s Low) below that at 118.30 (March levels).