By Fast Brokers – The USD/JPY has stayed range-bound the past 24 hours despite a broad-based breakout in the risk trade. The Fed maintained its dovish monetary policy, resulting in a pullback in the Dollar across the board. Though the USD/JPY did pull back a bit, it held firm after a couple retests of the highly psychological 90 level ahead of the BoJ’s own monetary policy meeting. The BoJ opted to double liquidity designated for bank lending in a sign of good faith for the DPJ’s call to fight deflationary pressures. The BoJ’s liquidity injection coupled with the Fed’s consistent dovish stance has resulted in a sideways moving USD/JPY. Additionally, two members of the BoJ dissented to the central’s bank’s injection, showing all members are not on board for looser liquidity measures in the future. However, should upcoming U.S. economic data outperform the USD/JPY could head higher again since investors would likely speculate that the Fed will tighten before the BoJ. The U.S. will release CPI, Unemployment Claims, and the Philly Fed Index tomorrow. Therefore, investors should keep a sharp eye on the USD/JPY’s reaction to tomorrow’s data points. Bernanke will also testify before congress today, which could have the potential to move the Greenback.
Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/15, and 3/12 highs. Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 3/16 and 3/9 lows.
Present Price: 90.40
Resistances: 90.45, 90.52, 90.58, 90.63, 90.69, 90.75
Supports: 90.36, 90.29, 90.21, 90.14, 90.08, 90.01
Psychological: 90, March highs
(click chart to enlarge)
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