USD/JPY targets 100.80 (video)
By Kira Iuhktenko, FBS analyst
This week USD/JPY weakened from the 102.10 resistance to the 101.00 mark. The pair met buyers at the 55-week MA. At the same time, this is the top of the monthly bullish Ichimoku Cloud. Japanese yen was in demand this week on the back of the increased risk aversion. Low US bond yields increase the bearish pressure on the pair.
The long-term picture for the USD/JPY remains bullish as long as the 100.00 support holds. However, given the unceasing selling pressure, there is some more space for a decline. Fix below the 101.20 support (this is the top of the weekly Ichimoku) will open the way to 100.80. This level is expected to act as a next support for the market – this is the lower border of the long-term descending triangle. Next key support lies at 100.00 yen – the sellers are very unlikely to break below this mark. Resistance is seen at 102.00/10, 102.80 and 104.00.
Monetary policies of the US and Japan’s central banks remain the key drivers for the pair. In a longer term USD/JPY is expected to consolidate in the 100-104 range until we don’t get any clear signals from any of the regulators. This is unlikely to happen before September-October.
Next week the Bank of Japan will hold its monetary policy meeting. No additional easing is expected. However, economists at Nomura expect the regulator to sound not so hawkish as well as the economy is facing some problems these months.