Sep
2
2010
2
2010
USD/JPY Fluctuates Above August Lows
The USD/JPY is fluctuating just above August lows as the currency pair flirts with the idea of taking yet another step lower. That being said, it will be very important for the USD/JPY to consolidate above August lows and establish a more lasting bottom. Otherwise, the currency pair may continue drifting into troubling historical level. The USD/JPY did receive some good news yesterday after America’s manufacturing PMI topped analyst estimates. The release resulted in a huge rally in U.S. equities and many risk assets participated. In fact, it is likely this encouraging PMI release which prevented the USD/JPY from deteriorating below August levels. However, the USD/JPY’s footing is still on weak ground, leaving potential stability up to news and data from the EU and U.S. Investors are presently awaiting the conclusion of the ECB’s monthly monetary policy meeting followed by U.S. pending home sales. The week will be highlighted by tomorrow’s headline U.S. employment data. That being said, the trading week could end on a rather volatile note. If U.S. employment data disappoints then August lows could give way since analysts and investors have not been impressed by the BOJ’s recent action, or lack thereof. Therefore, investors should keep a close eye on the broad-based reaction of the risk trade to the aforementioned events.
Technically speaking, the USD/JPY has supports in the form of intraday and 8/24 lows. As for the topside, the USD/JPY faces technical barriers in the form of intraday highs and the psychological 85 level.
Present Price: 84.36
Resistances: 84.15, 84.25, 84.39, 84.47, 84.57, 84.68
Supports: 83.98, 83.89, 83.70, 83.57
Psychological: 85, August Lows
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Posted by: Matthew Myers
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