6 Jan 2016
USD/JPY to attack 118 in the sesison?
FXStreet (Guatemala) - USD/JPY is licking its wounds in the Tokyo session as markets remain in risk-off mode with tensions in the Middle East, concerns in the Chinese crisis and Global growth outlooks attracting safe haven flows into the Yen and exposing further downside in the major.
The downside, on the other hand might be limited to other fundamentals domestic to Japan. It would be difficult to see the Yen continue to strengthen when Japan needs to look at reaching their inflation target in the given time frames and additional stimulus/easing would counter continued strength in the Yen.
USD/JPY levels on the downside
Meanwhile, technically, there is still room to go to the downside before we reach critical support. " In the 4 hours chart, the technical indicators are turning south after erasing their extreme oversold readings, supporting a downward extension towards 118.00 on a break below 118.70", explained Valeria Bednarik, chief analyst at FXStreet. Analysts at Scotiabank also favored further downside, "Recent declines have been limited below support around 118.80, with few significant support levels ahead of 118"
The downside, on the other hand might be limited to other fundamentals domestic to Japan. It would be difficult to see the Yen continue to strengthen when Japan needs to look at reaching their inflation target in the given time frames and additional stimulus/easing would counter continued strength in the Yen.
USD/JPY levels on the downside
Meanwhile, technically, there is still room to go to the downside before we reach critical support. " In the 4 hours chart, the technical indicators are turning south after erasing their extreme oversold readings, supporting a downward extension towards 118.00 on a break below 118.70", explained Valeria Bednarik, chief analyst at FXStreet. Analysts at Scotiabank also favored further downside, "Recent declines have been limited below support around 118.80, with few significant support levels ahead of 118"