By Fast Brokers – The USD/JPY continues to fluctuate below its highly psychological 90 level despite heightened volatility in the Euro and Aussie. Japan’s surge in CapEx (20.1%), suggesting a pickup in manufacturing and economic activity. However, it will be interesting to see how Toyota recalls impact CapEx the next time around. Regardless, it’s a welcome development for a beleaguered Japanese economy battling deflationary pressures. The risk trade received some good news today in the form of strong Australian employment data and weaker than expected CPI data from China. Such developments would normally be positive for the USD/JPY, yet the currency pair seems to be held down by economic uncertainty in the EU. Speaking of which, investors should continue to monitor the Euro’s reaction the to the EU’s decision to assist Greece with its debt issues. Meanwhile, the U.S. released stronger than expected weekly Unemployment Claims, a positive development for the Dollar. The EU will release Germany’s Prelim GDP tomorrow followed by retail sales and consumer sentiment numbers from the U.S. Hence, the trading week could end on a volatile note. Yen traders will likely be paying close attention to U.S. retail sales numbers since they could give further insight in regards to the state of Japan’s manufacturing sector.
Technically speaking, the USD/JPY still has multiple uptrend lines serving as technical cushions along with intraday, 2/10 and 2/5 lows. As for the topside, the USD/JPY faces multiple downtrend lines along with intraday, 1/28, and 1/29 highs. Furthermore, the psychological 90 area could continue to serve as a technical barrier.
Present Price: 89.70
Resistances: 89.88, 89.99, 89.99, 90.17, 90.32, 90.50
Supports: 89.72, 89.62., 89.50, 89.37, 89.23, 89.13, 89
Psychological: 90, February highs and lows
(click chart to enlarge)
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