As was anticipated, the retest of the six-week down-trend caused the Buck to decline against the Yen yesterday, as poor US fundamentals and political ‘issues’ overshadowed the Fed’s hawkish tone. As a result, the key support, namely the monthly S1 at 109.22, was briefly pierced, but the exchange rate quickly recovered back towards 109.50. The USD/JPY pair still has a number of strong resistances in close proximity, which are all likely to contribute to another leg down. Moreover, technical indicators keep suggesting the bearish momentum is to prevail today, bolstering the possibility of the negative outcome. Furthermore, with the breach of the key support, the given pair is now exposed to falling under the 109.00 mark, with the next solid support being only the 108.00 psychological level.
