By Fast Brokers – The USD/JPY is consolidating above Friday lows as we recognize consolidating patterns across the FX market. The U.S. markets are closed today, meaning volume could be sparse today. However, we have seen volatility pick up on low volume, so investors may want to keep an eye on the markets. Although the USD/JPY’s technicals deteriorated last week, BoJ Governor Shirakawa reiterated the central bank’s intent to fight deflationary pressures. Therefore, it seems the BoJ’s loose monetary policy could be in place for quite some time. Shirakawa’s dovish monetary stance could limit downward movements in the USD/JPY for the near-term. Furthermore, should conditions really deteriorate for the USD/JPY Shirakawa and Kan could become more vocal in defense. On the flipside, should investors make a return to the risk trade the USD/JPY could really benefit since investors are anticipating a loose monetary stance from the BoJ. Meanwhile, activity should pick up in the FX markets with pricing data on the way from the UK and U.S. along with China’s GDP and Industrial Production data during Thursday’s Asia trading session. As a result, investors could have the ammo necessary for making directional commitments, meaning investors should keep a close eye on technicals of the USD/JPY and its correlations as the week wears on.
Technically speaking, the USD/JPY has our 1st and 2nd tier uptrend lines serving as technical cushions along with intraday lows and the highly psychological 90 level should it be tested. As for the topside, the USD/JPY faces multiple downtrend lines along with 1/14 and 1/12 highs.
Present Price: 90.74
Resistances: 90.75, 90.91, 91.15, 91.38, 91.55, 91.84
Supports: 90.54, 90.37, 90.24, 90.05, 89.86, 89.72
Psychological: 90, January highs and lows
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