By Fast Brokers – The USD/JPY is consolidating around its psychological 90 level as it tries to form a bottom above last week’s lows like the rest of the risk trade. The USD/JPY could undergo another one of its extended consolidative periods like we witnessed in the middle of the month. However, markets are still vulnerable to volatility due to unstable conditions in the EU. The BoJ proved to be proactive again last week by announcing another 1 Trillion yen lending program at the benchmark rate in order to bolster economic growth. This follows a $22 billion injection of liquidity the week before. The two actions could help buoy the USD/JPY over the near-term. However, there’s little reason to believe the Yen will lose its status as a safe haven should there be another large flight from risk. Meanwhile, the USD/JPY could continue to fluctuate around 90 due to its psychological relevance as investors decided where to take the next leg. Japan will be quiet on the data wire, leaving the USD/JPY up to psychological events in the EU and data from the U.S. over the next couple trading sessions.
Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with intraday highs and the psychological 91 level. As for the downside, the USD/JPY has technical supports in the form of intraday and 5/21 lows.
Present Price: 90.14
Resistances: 90.27, 90.42, 90.55, 90.64., 90.77, 90.88
Supports: 90.01, 89.86, 89.73, 89.54, 89.34, 89.20
Psychological: .90, May lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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