By Fast Brokers – The USD/JPY is still in hibernation and edging lower towards 91 despite another solid pop in the EUR/USD. The USD/JPY’s lack of participation to the topside amidst the recent risk rally is a bit disconcerting since they are normally positively correlated. However, the USD/JPY is still range bound and the currency pair could move in either direction, so we will have to wait and see how conditions in the FX markets develop. News has been light out of Japan today as investors await next month’s upper house elections. Focus remains on the EU as Spain fights investor uncertainty by announcing it will release the results from its bank stress tests. Additionally, EU leaders are meeting for a one day summit in an effort to exemplify an essence of coordination throughout the union while shoring up investor confidence. However, tripwires are still on the ground as the gap between Spanish and German bond yields reach all-time highs. Attention will shift to the U.S. later as earnings trickle in and the government releases CPI, Philly Index, and weekly unemployment claims data. If the U.S. data set comes in positive this should help buoy the USD/JPY. The BoJ will release its monetary policy meeting minutes tomorrow and it will be interesting to see if the central bank addresses the government’s deflation concerns. The data wire will be relatively quiet around the globe tomorrow, meaning the FX markets will likely be driven by today’s U.S. data and any psychological developments in the EU.
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: 91.22
Resistances: 91.45, 91.58, 91.70, 91.85, 91.97., 92.11, 92.25
Supports: 91.13, 91, 90.86, 90.74, 90.62, 90.50, 90.31, 90.20
Psychological: .90, .92, June highs and lows
(click chart to enlarge)
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