USD/JPY Recovers From Sizable Intraday Pullback
The USD/JPY is recovering from a hefty intraday pullback which sent the currency pair tumbling below its highly psychological 90 level. There isn’t much news to infer why the USD/JPY experienced such a sizable intraday decline, which leads us to believe the movement could be purely technical. Regardless, the currency pair is back above 90and is strengthening in reaction to the U.S. data set. Today’s U.S. data had a positive bias with the Current Account and Philly Index both topping expectations while Unemployment Claims and CPI remained relatively unchanged. As we mentioned in our previous post, positive U.S. data has the potential to impact the USD/JPY considerably since it gives reason for investors to speculate that the Fed will tighten before the BoJ. The BoJ is still under pressure from the DPJ in regards to fighting deflationary pressures. Hence, positive U.S. data leads investors to favor the Dollar over the Yen due to the Fed’s inclination to have a tighter monetary policy stance down the road. The data wire will be relatively quiet tomorrow, meaning the USD/JPY could opt to stick around its present trading range barring any key psychological developments.
Technically speaking, the USD/JPY faces multiple downtrend lines along with intraday, 3/17, and 3/12 highs. Meanwhile, the highly psychological 90 area could continue to have an influence over the USD/JPY’s movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and 3/17 lows. .
Present Price: 90.40
Resistances: 90.45, 90.52, 90.58, 90.63, 90.69, 90.75
Supports: 90.36, 90.29, 90.21, 90.14, 90.08, 90.01
Psychological: 90, March highs and lows
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