15 Oct 2013
USD/JPY downwards despite a broad-based recovery in risk appetite
FXstreet.com (Athens) – The USD/JPY is trading lower since the kick off of the European trading session, despite the fact that US lawmakers through news wires “mention progress on the budget deal.”
USD/JPY grinds slowly downwards despite certainty that the US will not default
The USD/JPY was trading upwards since the early opening of the Asian trading session but soon since the kick-off of the Europe opening session it retreated. One main reason for that downtrend shift might well be that Nikkei lost the 14.500 levels; elsewhere, both the industrial production and capacity utilization released at very weak levels in Japan. Summers expressed “certainty that the US will not default,” while Japan’s Abe, speaking to the Parliament, said that “he will work to boost employment and create a virtuous circle of investment.” Finally traders should bear in mind that the implied volatilities are still immensely down for most FX majors’ versus USD, thus, market participants have already priced in a resolution even at the 12th hour regarding the US debt ceiling issue.
Technical Outlook on the USD/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “USD/JPY continues to see a strong rebound from its 200 day ma at 97.00. Last week it was capped by the 50% retracement at 98.58 but last week’s rise looks directional. The six month resistance line at 99.68 is still being targeted. While a challenge of the top of the recent range at 99.72/100.62 is plausible we look for this to hold. Potential dips should find minor support around the 97.50 late September low. Further down the 200 day moving average guards at 97.00 the seven month support line at 95.75.”
USD/JPY grinds slowly downwards despite certainty that the US will not default
The USD/JPY was trading upwards since the early opening of the Asian trading session but soon since the kick-off of the Europe opening session it retreated. One main reason for that downtrend shift might well be that Nikkei lost the 14.500 levels; elsewhere, both the industrial production and capacity utilization released at very weak levels in Japan. Summers expressed “certainty that the US will not default,” while Japan’s Abe, speaking to the Parliament, said that “he will work to boost employment and create a virtuous circle of investment.” Finally traders should bear in mind that the implied volatilities are still immensely down for most FX majors’ versus USD, thus, market participants have already priced in a resolution even at the 12th hour regarding the US debt ceiling issue.
Technical Outlook on the USD/JPY
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “USD/JPY continues to see a strong rebound from its 200 day ma at 97.00. Last week it was capped by the 50% retracement at 98.58 but last week’s rise looks directional. The six month resistance line at 99.68 is still being targeted. While a challenge of the top of the recent range at 99.72/100.62 is plausible we look for this to hold. Potential dips should find minor support around the 97.50 late September low. Further down the 200 day moving average guards at 97.00 the seven month support line at 95.75.”