By Fast Brokers – The USD/JPY is looking to continue its consolidation above Friday lows as the currency pair undergoes another one of its characteristic sideways periods. However, investors should keep in mind that the USD/JPY always has the potential to come alive at any given moment, so investors shouldn’t become complacent amid the present cool down. On a positive note, the USD/JPY is still trading well above 5/7 lows and its highly psychological 90 level. Core machinery orders printed slightly below analyst estimates, though the figure isn’t really anything to be overly concerned about. More of a cause for concern is the collapse in the Shanghai Composite. The SCI skidded another -5% today as fears mount that the government will continue to apply the breaks to the real estate industry. Considering China is Japan’s top trading partner, a slowdown in China could be bad news for Japanese manufacturers who are finally starting to regain their footing. Meanwhile, the Yen should maintain its role as a safe haven amid excessive uncertainty in the markets. On the other hand, should conditions in Europe improve this could help lift the USD/JPY as investors pick up the risk trade again, particularly considering the $22 billion the BoJ just pumped into the system.. Regardless, psychological headwinds remain and investors should keep their eyes peeled.
Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday, 5/14, 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: 92.36
Resistances: 92.38, 92.50., 92.66, 92.82, 92.95, 93.06, 93.29
Supports: 92.17, 92.07, 91.92, 91.80, 91.70, 91.53, 91.37
Psychological: .93, .92, .91, .90
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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