By Fast Brokers – The USD/JPY continues to hover around its psychological 90 level while showing a muted reaction to yesterday’s GDP data. Although Japan’s GDP surpassed expectations by a basis point, the previous release was revised downward by 1.2%. More importantly, the GDP Deflator came in at a staggering -3%. Hence, deflationary pressures continue to wear on Japan’s economy and the decline in prices is likely on the minds of BoJ officials considering they have declared their intent to fight deflation. Therefore, it will be interesting to see how Japan’s monetary policy decision pans out during Thursday’s Asia trading session. Meanwhile, investors are awaiting more U.S. economic data, including the Empire Index and TIC Long-Term Purchases. Furthermore, investor uncertainty remains regarding the debt issues in the EU along with monetary tightening in China. Investors are expecting Japan’s Tertiary Industry Activity to remain at -.2% tomorrow. For the time being, it seems the USD/JPY is content with hovering around 90 until either the BoJ becomes more active or there is a shift in overall investor sentiment regarding the Dollar. That being said, the USD/JPY has built a little upward momentum since bottoming in February by setting higher lows since 2/4.
Technically speaking, the USD/JPY has multiple downtrend lines serving as technical barriers along with 2/12 and 1/28 highs. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 2/11, and 2/10 lows. Meanwhile, the highly psychological 90 area could continue to play a key role.
Present Price: 89.90
Resistances: 89.99, 90.07, 90.20, 90.32, 90.42, 90.55
Supports: 89.86, 89.72, 89.62., 89.50, 89.37, 89.31
Psychological: 90, February highs and lows
(click chart to enlarge)
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