8 Apr 2015
USD/JPY might swing higher towards 120.30 ahead of FOMC Minutes – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Dhwani Mehta, uses the macro as well as the technical picture to explain that USD/JPY might make a move higher towards 120.30 ahead of the FOMC Minutes.
Key Quotes
“Technically, on daily chart, the USD/JPY pair is trading in a triangle formation with the upside capped by trend line resistance around 120.40 and the downside cushioned by critical support at 118.90 levels.”
“At the moment, within this formation, the pair seems to be trapped between 120.30 on the upside and 10-DMA support located at 119.63.”
“Furthermore, a reversal from 119.63 levels is more likely as it happens to 38.2% Fib retracement, channel top resistance-turned-support.”
“More so, the daily RSI at 49.30 aims lower, suggesting that the pair may test the 10-DMA support before rebounding to retest 120 barrier. A swing back on the upside from that level would be viewed as fairly bullish, potentially prompting another test of the 120.30 above 120 handle.”
“On the macroeconomic front, the highlight of today’s data-light US session is going to be Fed’s March 18 minutes release which might offer some insight into the last Fed meeting, which was taken as dovish by market participants.”
“We expect a likelihood of a reversal in the USD/JPY pair ahead of FOMC minutes release as markets seem to have already discounted major US dollar moves on FOMC minutes release with the downward revision in growth forecasts and impact of stronger USD related discussions been already priced-in.”
Key Quotes
“Technically, on daily chart, the USD/JPY pair is trading in a triangle formation with the upside capped by trend line resistance around 120.40 and the downside cushioned by critical support at 118.90 levels.”
“At the moment, within this formation, the pair seems to be trapped between 120.30 on the upside and 10-DMA support located at 119.63.”
“Furthermore, a reversal from 119.63 levels is more likely as it happens to 38.2% Fib retracement, channel top resistance-turned-support.”
“More so, the daily RSI at 49.30 aims lower, suggesting that the pair may test the 10-DMA support before rebounding to retest 120 barrier. A swing back on the upside from that level would be viewed as fairly bullish, potentially prompting another test of the 120.30 above 120 handle.”
“On the macroeconomic front, the highlight of today’s data-light US session is going to be Fed’s March 18 minutes release which might offer some insight into the last Fed meeting, which was taken as dovish by market participants.”
“We expect a likelihood of a reversal in the USD/JPY pair ahead of FOMC minutes release as markets seem to have already discounted major US dollar moves on FOMC minutes release with the downward revision in growth forecasts and impact of stronger USD related discussions been already priced-in.”