17 Oct 2013
USD/JPY falls apart on profit-taking
FXstreet.com (Athens) – The USD/JPY is under great pressure since the kick off of the European trading session and especially the last hour - amidst great volatility – due mostly to profit-taking.
USD/JPY surrenders on profit taking after having being rejected by 99.00 level
The USD/JPY is heading immensely south the last hour breaking its 200-hourly SMA (97.90) as it is now moving roughly at the 97.85 area, having already lost approximately 115 pips from its daily highs in early Asian session (99.01). While the cross initially got boosted in the kick off of the Asian trading session a series of take-profits (sell limit orders) being hit across the board, dragging down the cross immensely. Elsewhere, China's Dagong downgraded US Credit Ratings to A- from A, while a further downgrade of the US credit rating is looking more likely and not only from Fitch who have put their AAA rating under review. All in all, explanation of the cross collapse might be more simple, as since the speculation has already vanished, it’s high time for profit-taking.
Technical Aspects on the USD/JPY
Axel Rudolph, Head Technical Analyst at Commerzbank mentions that the USD/JPY briefly rose towards the 61.8% Fibonacci retracement at 99.07 before coming off it and slipping back below the 50% retracement at 98.58. Over the next few days the six month resistance line at 99.61 remains in play, though. While a challenge of the top of the recent range at 99.72/100.62 is plausible we look for this to hold. Potential dips should find minor support around the 97.50 late September low. Further down the 200 day moving average at 97.10 guards the seven month support line at 95.79.”
USD/JPY surrenders on profit taking after having being rejected by 99.00 level
The USD/JPY is heading immensely south the last hour breaking its 200-hourly SMA (97.90) as it is now moving roughly at the 97.85 area, having already lost approximately 115 pips from its daily highs in early Asian session (99.01). While the cross initially got boosted in the kick off of the Asian trading session a series of take-profits (sell limit orders) being hit across the board, dragging down the cross immensely. Elsewhere, China's Dagong downgraded US Credit Ratings to A- from A, while a further downgrade of the US credit rating is looking more likely and not only from Fitch who have put their AAA rating under review. All in all, explanation of the cross collapse might be more simple, as since the speculation has already vanished, it’s high time for profit-taking.
Technical Aspects on the USD/JPY
Axel Rudolph, Head Technical Analyst at Commerzbank mentions that the USD/JPY briefly rose towards the 61.8% Fibonacci retracement at 99.07 before coming off it and slipping back below the 50% retracement at 98.58. Over the next few days the six month resistance line at 99.61 remains in play, though. While a challenge of the top of the recent range at 99.72/100.62 is plausible we look for this to hold. Potential dips should find minor support around the 97.50 late September low. Further down the 200 day moving average at 97.10 guards the seven month support line at 95.79.”