14 Mar 2014
USD/JPY stalls at upper trendline, topside not threatened
FXStreet (Bali) - USD/JPY saw the sharpest daily loss since Feb 3rd, after a new wave of risk aversion in the last US session.
Risk off, BoJ easing delay weigh on Yen shorts
Talk of rising tensions between Russian and Ukraine, with an increase of military presence along the Ukrainian border, did the trick to kick-start the flight to safety.
Moreover, this week's press conference by Governor Kuroda who showed optimism on economic and inflation outlook, may have led some perma Yen short to have a near-term rethink about the ability of the pair to pursue higher levels, as expectations of BOJ easing again are further delayed.
As Nomura notes: "It could slow JPY weakness momentum for now, but it should lower the downside risk of USDJPY after the April BOJ meeting."
USD/JPY outlook
The breakout of 102.50/70 support led to a extreme acceleration of losses, with the exchange rate only finding enough buying interest at the intersection with an upper trendline coming from Feb 4.
According to Jim Langlands, FX Strategist at FXCharts: "Technically, the hourlies are now very oversold, although show no sign yet of turning any higher. The short term negative momentum may run out of some steam here, although we need to allow for a break of the current support, to trigger the stops that will lie below, and we could yet see a near-term run to the recent low at 101.20."
Risk off, BoJ easing delay weigh on Yen shorts
Talk of rising tensions between Russian and Ukraine, with an increase of military presence along the Ukrainian border, did the trick to kick-start the flight to safety.
Moreover, this week's press conference by Governor Kuroda who showed optimism on economic and inflation outlook, may have led some perma Yen short to have a near-term rethink about the ability of the pair to pursue higher levels, as expectations of BOJ easing again are further delayed.
As Nomura notes: "It could slow JPY weakness momentum for now, but it should lower the downside risk of USDJPY after the April BOJ meeting."
USD/JPY outlook
The breakout of 102.50/70 support led to a extreme acceleration of losses, with the exchange rate only finding enough buying interest at the intersection with an upper trendline coming from Feb 4.
According to Jim Langlands, FX Strategist at FXCharts: "Technically, the hourlies are now very oversold, although show no sign yet of turning any higher. The short term negative momentum may run out of some steam here, although we need to allow for a break of the current support, to trigger the stops that will lie below, and we could yet see a near-term run to the recent low at 101.20."