FXStreet (Guatemala) - USD/JPY is currently trading on the bid and reversing the cautious opening's bearish gap and up from the lows of 122.21.
The tragic circumstances in Paris that occurred after the NY close last week will likely be the focus throughout the week running up to the next ECB meeting while markets analyse the potential risk of Paris falling into a recession in an already deflationary economy in the EZ and how this will impact the ECB's decision making in respect of the QE programme.
The Yen will benefit on risk-off flows while the greenback could slow the pace of the USD/JPY decent as we head towards December's FOMC meeting where markets are looking for the Fed to finally hike interest rates and start to normalise their policy going forward in an improving US economy.
Amongst all that, the BoJ now has to justify their overly bullish outlook with Japan technically falling back into recession with the Q3 GDP data that was released prior to the Tokyo open and the divergence between the Fed and BoJ could see continued demand coming into the major and support the price above psychological 122 handle and above the accelerated uptrend that lies at 121.71 ahead of the 3 month support line at 119.07.
USD/JPY levels
Technically, key support comes in at 117.86 and the 2012-2015 uptrend and the price remains with a bullish bias above here targeting June highs through the 125 handle on the wide. 123.11 comes as first resistance, 123.41 as R2 and 123.72 R3.
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