Currency Analyst since 2010

USD/JPY: negative prospects

Yesterday USD/JPY closed below the daily Ichimoku Cloud (95.50) and tested 93.78 before closing above 95.00. Today the greenback is once again trading below this handle.

The pair’s poised for the fourth week of declines. The battle between bulls and bears is now taking place around 94.85 (100-month MA). As we said yesterday, the possibility of the decline to 92.70/60 (April lows) and even to 90.40 (50% retracement of the pair’s advance from September to May) has increased. The nearest support lies at 93.55 (38.2% Fibo). Resistance lies at 96.00, 96.50 and 97.00.

Nikkei rose by 1.94% today after sliding by 6.35% yesterday. Analysts say that JPY is strengthening as the Bank of Japan failed to contain volatility in Japanese bond yields. Traders fear that Japanese central bank is unwilling or unable to deliver the bold monetary easing measures promised by Shinzo Abe. According to the experts, Japanese exporters and asset managers are selling USD. The Fed’s meeting on June 18-19 will be the most important event of the next week.

Chart. Daily USD/JPY

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