By Fast Brokers – The USD/JPY is breaking lower from its consolidation, touching its psychological 91 level as investors head for the Yen in search of a safe haven amid rampant uncertainty in the EU. Germany’s decision to ban short selling on government bonds proved to be the breaking point for a recently resilient USD/JPY, stirring up volatility in the normally calm currency pair. However, the USD/JPY does remain above its highly psychological 90 level and 5/7 lows. Fortunately for bulls, the EUR/USD and Cable are popping today in what appears to be a short squeeze from oversold conditions. The short squeeze is helping buoy the USD/JPY ahead of tomorrow’s Prelim GDP release. Investors are expecting an improvement in growth to 1.4%, and it wouldn’t’ be surprising to receive a strong GDP figure from Japan since China’s economy has been humming along the last month. Additionally, improvements in U.S. consumption likely benefitted beleaguered manufacturers and exporters. However, attention will likely remain focused on the EU as leaders try to iron out details for its huge $1 trillion rescue package.
Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday, 5/17, and 5/18 highs. Additionally, the psychological .92level 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 .90 level should serve as a solid technical cushion if it’s reached.
Present Price: 91.31
Resistances: 91.37, 91.55., 91.66, 91.85, 92.01, 92.17, 92.39
Supports: 91.05, 90.88, 90.77, 90.55, 90.42, 90.27
Psychological: .92, .91, .90
Market Commentary provided by Fast Brokers.
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