By Fast Brokers – Another day same story, the USD/JPY is hugging 93 as it continues another one of its common tight range periods. It’s interesting the USD/JPY is so calm despite high volatility in the EU region. However, investors should keep in mind that the USD/JPY has the potential to jolt to life, particularly if there is a technical game changing move in another major dollar pair. Hence, investors should keep an eye on activity in the Euro and whether the EUR/USD sacrifices key support levels. Meanwhile, investors are waiting on U.S. existing home sales. Weak U.S. housing data could weigh on the USD/JPY, and vice versa. U.S. unemployment claims made little improvement and today’s earnings releases have disappointed, taking a bit of steam out of the USD/JPY’s upward momentum. Japan’s trade balance printed in line with estimates as export demand improves. On another note, the IMF mentioned that Japan may need to loosen liquidity further over the medium-term in order to counter deflation, echoing the DPJ’s sentiment. This is a positive development for the USD/JPY, yet clearly isn’t having much of an impact thus far. Governor Shirakawa will address the public tomorrow and statements with BoJ members carry the potential to impact the Yen. However, the attention will likely remain focused on the EU, UK and U.S. with key data releases from all three. Hence, the week could end on a volatile note.
Technically speaking, the USD/JPY faces technical barriers in the form multiple downtrend lines along with intraday, 4/14, and 4/7 highs. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday, 3/29, and 4/19 lows. Additionally, the psychological 92 level could continue to serve as a psychological cushion should it be tested.
Present Price: 93.10
Resistances: 93.10, 93.20, 93.38, 93.51, 93.64, 93.75
Supports: 92.91, 92.81, 92.71, 92.57, 92.47, 92.37
Psychological: .92, .93, April highs and lows
(click chart to enlarge)
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