By Fast Brokers – The USD/JPY’s pullback has picked up traction, dropping below 2nd tier uptrend and 3rd tier downtrend lines. Continued strength in the Yen comes after stronger than expected economic data from Japan to kick off the week. Meanwhile, the S&P futures are logging considerable declines today, giving investors more incentive to favor the Yen and head for safety. However, today’s pullback in the S&P comes on limited news, indicating a case of overbought conditions. Therefore, it seems the USD/JPY’s positive correlation with U.S. equities is back in full swing. Volatility in the USD/JPY has really picked up considering its dormant behavior as of late.
Despite today’s setback, the USD/JPY remains well above our 1st tier uptrend line and the psychological 95 level. Therefore, bulls shouldn’t throw in the towel just yet. Our 1st tier uptrend line has proven reliable recently. However, the USD/JPY’s August highs are beneath its June highs, setting up the possibility of a head-fake and a retreat into the grips of its downtrend. Therefore, we’ll have to monitor how the USD/JPY’s support system holds up.
Present Price: 95.85
Resistances: 96.10, 96.47, 96.81, 97.10, 97.47
Supports: 95.75, 95.61, 95.30, 94.99, 94.69
Psychological: 95
Market Commentary provided by Fast Brokers.
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