USD/JPY descends from 103.00 yen (video)
By Kira Iukhtenko, FBS
USD/JPY had a volatile week, extending the decline from the 103.00 resistance and losing almost 150 pips. On Friday the pair hit a weekly low of 101.40. We see that the pair returned into the long-term descending triangle and is testing the upper border of the bullish Ichimoku to the downside. The technical picture turned bearish and we now expect another retest of the 101.00 support in the nearest future.
In our view, to return to sustainable growth we need to hear about more BoJ easing or higher US rates. As it was widely expected, the Bank of Japan left monetary policy unchanged in August. It is now becoming clear that the Japanese economic recovery slowed in the recent weeks, but it alone doesn’t seem to be enough to push the regulator to increase monetary stimulus. Low easing expectations support the Japanese yen. What’s more, intensified geopolitical tensions in Ukraine and Iraq push the safe-haven currencies higher.