By Fast Brokers – The USD/JPY has popped back above its highly psychological 90 level after yesterday’s strong close in U.S. equities drove the risk trade higher across the board. The USD/JPY is clearly in lock with the risk trade right now, meaning investors should keep an eye on the EUR/USD and Cable in regards to their ability to continue their consolidation and to build a bit of upward momentum. However, considerable downward pressure remains considering the extent of last week’s pullback. Hence, investors should monitor the EU news wire for any new developments regarding fiscal conditions in Greece and Spain. Should another wave of negative psychological forces hit the risk trade this could drag the USD/JPY lower as investors head to the Yen as a safe haven. Meanwhile, the data wire will focus on the U.S. with DGO and new home sales on the way. Considering how demand for Japanese exports has ripened it wouldn’t be surprising to see some strong DGO numbers. Solid U.S. data could boost the risk trade and vice versa. Speaking of Japanese exports, Japan will release its trade balance data tomorrow followed by UK realized sales and U.S. prelim GDP. Therefore, more emphasis could be placed on economic data over the next 24-48 hours unless there is a new psychological development in the EU.
Technically speaking, the USD/JPY faces technical barriers in the form of multiple downtrend lines along with 5/24 highs and 5/20 highs. As for the downside, the USD/JPY has technical supports in the form of 5/25 and 5/20 lows. Additionally, the highly psychological 90 level could have a gravitational pull on the USD/JPY over the near-term.
Present Price: 90.38
Resistances: 90.42, 90.55, 90.64, 90.77., 90.88, 91.14
Supports: 90.30, 90.11, 89.99, 89.84, 89.73, 89.54, 89.34
Psychological: .90, May and March lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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