By Fast Brokers – The USD/JPY is popping past its highly psychological 90 level along with our 2nd and 3rd tier downtrend lines in reaction to the BoJ’s monetary policy statement during the Asia trading session. The BoJ stated that it is steadfast on fighting deflation, meaning it could maintain its dovish monetary policy for quite some time. The BoJ’s apparent commitment to its loose monetary policy, combined with recent broad based strength in the Dollar, are combining forces to send the USD/JPY beyond some key topside technicals. Our 2nd and 3rd tier downtrend lines run through October lows. Hence, should the USD/JPY create some topside separation, the currency pair could piece together a solid near-term run towards 92. That being said, the USD/JPY still does face multiple downtrend lines along with previous December highs. Furthermore, the USD/JPY’s longer-term downtrend is still in play. Hence, the road higher could be a rocky ahead should positive the currency pair’s momentum persist. Meanwhile investors should keep an eye on broad-based activity in the Dollar since the EUR/USD and GBP/USD dropped below some key uptrend lines yesterday. Further deterioration in these currency pairs could yield strength in the USD/JPY. Japan will kick off the Trading week during Monday’s Asia trading session with the release of its Trade Balance.
Technically speaking, the USD/JPY faces topside technical barriers in the form of previous December highs along with our 4th and 5th tier downtrend lines. Furthermore, the psychological 90 area could still play a role considering how tough the trading zone has been to overcome in the past. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 12/14, and 12/09 lows. Meanwhile, the psychological 90 level could begin to work as a technical cushion.
Present Price: 90.42
Resistances: 90.58, 90.76, 90.94, 91.05, 91.22, 91.39
Supports: 90.36, 90.25, 90.10, 89.90, 89.75, 89.52
Psychological: 90, December Highs and Lows
Market Commentary provided by Fast Brokers.
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