By Fast Brokers – The USD/JPY is continuing its consolidation between 91-92 despite broad based gains in the risk trade. Although the BoJ kept its benchmark rate unchanged the central bank announced a special loans program for commercial banks aimed at stimulating specific growth sectors. Meanwhile, Prime Minister Kan seems to be setting the ground for tax hikes and/or other measures for reducing Japan’s expanding debt. Japanese citizens seemed satisfied so far with Kan’s approach even though the new PM is in the waking hours of his reign. He still hasn’t dealt with the issue of where to put America’s military base which is what ran Hatoyama out of office. Therefore, we’ll have to wait and see how Kan fares after next month’s upper house election. Getting back to fundamentals, Japan’s tertiary industry figure came in 4 basis points below analyst expectations. Therefore, even though business spending made an encouraging improvement last month, analysts may not be too pleased with the figure. Meanwhile, all eyes are on the EU after rumors spread that the IMF and U.S. Treasury are working on a $350 billion line of liquidity for Spain. Though unverified, the rumors are weighing a bit on the risk trade regardless. Key data will be coming from the U.S. tomorrow, including CPI, the Philly Index, and weekly unemployment claims. Even though the USD/JPY has been stuck in a narrow trading range for quite some time now, investors should keep in mind that the currency pair is prone to sudden and sharp movements after periods of hibernation.
Technically speaking, the USD/JPY faces multiple downtrend lines along with 6/14 and 6/4 highs. As for the downside, the USD/JPY has technical supports in the form of multiple uptrend lines along with 6/10 and 6/1 lows. Additionally, the highly psychological 90 level should serve as a solid technical support should it be tested.
Present Price: 91.34
Resistances: 91.45, 91.58, 91.70, 91.85, 91.97., 92.11, 92.25
Supports: 91.24, 91.13, 91, 90.86, 90.74, 90.62, 90.50, 90.31
Psychological: .90, .92, June highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
