By Fast Brokers – The USD/JPY is continuing its consolidation, albeit an upwardly biased one, between 91-92 despite yesterday’s solid risk rally. The EUR/USD, Cable, and Aussie all logged substantial gains after the UK’s budget office predicted a smaller than expected deficit. However, the risk rally fizzled at the end of the trading session after news hit the wires that Moody’s lowered its rating on Greek debt to junk status. Meanwhile, the USD/JPY has been stuck in a range-bound pattern after the early June rally stemming from the resignation of Naoto Kan. However, as we’ve seen in the past, the USD/JPY is prone to sharp, sudden movements following days of relative inactivity. Therefore, investors should be wary. It seems the USD/JPY is waiting to see whether the new upward momentum in the risk trade can materialize into a more lasting trend. Hence, investors should keep a close eye on the ability of other major dollar pairs to break through key downtrend lines. Meanwhile, investors are waiting on the BoJ’s first monetary policy decision with Kan as prime minister. Regardless, investors aren’t expecting any drastic change in strategy with all central bankers monitoring activity in the EU. Speaking of which, keep a close eye on the EU news wires for any new developments.
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: 91.56
Resistances: 91.70, 91.80, 91.97., 92.11, 92.25, 92.39, 92.58
Supports: 91.53, 91.38, 91.29, 91.13, 91, 90.86, 90.74, 90.62
Psychological: .90, .92, June highs and lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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