By Fast Brokers – The USD/JPY is consolidating above yesterday’s lows as investors take advantage of oversold conditions. Meanwhile, we notice the Dollar is moving in lockstep since the USD/JPY is exhibiting a negative correlation with the EUR/USD and GBP/USD. Japan has Core Machinery Orders on deck and investors are expecting growth of 0.3%. However, more attention will likely be paid to tomorrow’s U.S. Retail Sales data. This week’s U.S. Trade Balance data revealed an improvement in imports. Therefore, it is possible tomorrow’s retail sales data could impress. Such a development would be positive for Japan’s economy since it would imply demand for Japanese manufactured goods. For the time being investors should keep an eye on the Dollar’s other major crosses for any key direction movements since the Dollar correlation is in full effect.
Technically speaking, the USD/JPY has rebounded nicely above our 3rd tire uptrend line while avoiding a retest of the highly psychological 90 level. Furthermore, the USD/JPY is now trading back above 1/5 highs, a positive technical development for the currency pair. However, the USD/JPY does face multiple downtrend lines along with 12/23 and 1/11 highs. As for the downside, the USD/JPY still has multiple uptrend lines serving as technical cushions along with 1/12 and 12/21 lows. Additionally, the psychological 90 level could serve as a reliable support should it be tested.
Present Price: 91.39
Resistances: 91.45, 91.61, 91.88, 92.13, 92.30, 93.47
Supports: 91.22, 90.96, 90.80, 90.54, 90.24, 90.05
Psychological: 95, 90, January highs and lows
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