USDJPY Retakes 112.00

USDJPY, H1

Post-BOJ and pre-FOMC, USDJPY catches a strong bid and moves over 112.00 in early European trading and stalled at 112.13. While gains yesterday reflected broader Yen declines, today they are driven by the firmer Dollar dynamic. A strong bid in EURJPY provided some Yen-selling fuel, aiding USDJPY upwards. The Japanese currency itself is lacking directional bias, steadying against most currencies today, after coming under broad pressure yesterday, following BOJ’s post-policy meeting guidance. The 10-year JGB yield rose back above 0.1%, reversing yesterday’s decline. In the bigger picture, USDJPY has been trading with little overall direction since early 2017, turning about a 10 big figure range in drawn-out oscillations, pulled lower during risk-off phases in global markets and pulled higher when markets are more focused on underlying fundamentals. The range over this period has been 104.63 to 115.50, and there doesn’t look much, at the moment, to suggest there will be shift out of this trend.

On the H1 chart, there  is  resistance at 112.25 (R1), 112.44 (July 20 High) and 112.68 (R2). Support sits at 111.88 (20-period moving average and Fractal Highs), 111.65 (Fractal Lows) and the Daily Pivot at 111.50.  RSI remains positive at 66.3 with the 5, 9 and 20 EMA’s aligned and also supportive. US ADP numbers at 12:15 GMT is the next key data point and it is expected to show an increase to 186,000 from 177,000 last month.

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Stuart Cowell

Head Market Analyst

HotForex

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