USD/JPY: under pressure
USD/JPY opened with a gap down at 101.48 after it closed below the daily Ichimoku Cloud on Friday. Yen is much more a safe haven than the greenback, so global political tensions make the pair decline.
Although US dollar is closed to the oversold level at H4 it can test February lows in the 100.75 area. We can’t rule out the slide to the 200-day MA at 100.15 as well. There are a lot of support levels in the 101/100 area. Also note that the 55-day MA is at 99.55. Resistance is at 101.70 (100-day MA), 102.10 (daily Kijun-sen) and 102.60 ahead of 103.20 (55-day MA). The negative scenario favored, but the outlook may change given many data releases scheduled in the US this week.
Last week Japan released high inflation data which made investors believe that the central bank can delay increasing stimulus. This is surely the reason to be more bullish on yen. In addition, Japanese industrial production rose by 4.0%, while retail sales added 4.4%.
This week Japanese economic calendar looks empty. The main factors influencing USD/JPY will be risk sentiment and US figures – ISM Manufacturing PMI on Monday and Non-Farm Payrolls on Friday. The bears need disappointing news from the US to increase selling pressure.
Chart. Daily USD/JPY