By Fast Brokers – As expected, finance minister Kan has taken over the prime minister position for the time being. This has brought some relief to yen bulls since Kan’s fiscal conservatism quells investor uncertainty. However, upper house elections are on the way and political events could continue to cause intermittent headwinds in major yen pairs over the next month. Regardless, the yen’s safe haven status appears intact during moments of elevated investor uncertainty. News spread that Hungary could be the next Greece after the new government revealed previous budget reports were inaccurate and Hungary’s deficit is actually much larger than reported. Additionally, U.S. employment data disappointed investors, only adding to anxiety and sending the risk trade tumbling across the board. The USD/JPY followed suit, though the currency pair’s new uptrend is still in place from a technical standpoint. Next week’s data wire will be quiet until Wednesday’s core machinery orders number. Additionally, the BoE and ECB will make monetary policy decisions on Thursday. Meanwhile, psychological forces should be driving the FX markets until then. That being said, investors should keep an active eye on the news wires since conditions in the EU are still unstable.
Technically speaking, the USD/JPY faces multiple downtrend lines along with 6/4 and 5/19 highs. As for the downside, the USD/JPY has technical supports in the form of multiple uptrend lines along with 6/4 and 6/1 lows. Additionally, the highly psychological 90 level should serve as a solid technical support should it be tested.
Present Price: 91.69
Resistances: 91.80, 91.97., 92.11, 92.25, 92.39, 92.58
Supports: 91.63, 91.53, 91.38, 91.29, 91.13, 91, 90.86
Psychological: .90, .92, June highs and lows
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