By Fast Brokers – The USD/JPY is sliding as investors divest from the risk trade across the board, a negative for the Yen’s safe haven status. The USD/JPY is testing 5/11 lows, a negative near-term technical development as the currency pair tries to avoid a return to last week’s rampant selling activity. Focus remains on the EU with prominent economists and central bankers throwing their hats into the ring as they voice their uncertainty concerning the effectiveness of the $1 trillion rescue package and the overall viability of the union. Despite the BoJ’s $22 billion liquidity injection last week, the USD/JPY is still prone to a downturn in the wake of extraordinary psychological circumstances as we’re experiencing today in Europe. Hence, investors should keep a sharp eye on the EUR/USD with the currency pair testing its October 2008 lows. If the EUR/USD really takes a turn for the worse, this could drag the USD/JPY and U.S. equities lower as well. On a positive note, U.S. consumption data satisfied analyst expectations, giving investors to buoy the USD/JPY due to relative economic performance.
Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday and 5/13 highs. Additionally, the psychological .93level could serve as a solid barrier should it be tested. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 5/7 lows. Furthermore, the psychological .92 area could continue to serve as a solid support over the near-term.
Present Price: 92.19
Resistances: 92.21, 92.38, 92.50., 92.66, 92.82, 92.95, 93.06
Supports: 92.03, 91.92, 91.80, 91.70, 91.53, 91.31
Psychological: .93, .92, .91, .90
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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