Monday, April 8, 2019

USD/JPY - 08 April 2019

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Fundamental Highlights

The Dollar/Yen dropped on Friday ignoring the better than expected NFP report, as upbeat data from Japan and Geopolitical tensions at Libya pushed traders to short-cover the Japanese Yen. Adding to the sentiment was the International Monetary Fund’s (IMF) Global Financial Stability Report (GFSR) that signaled downside risks to major economies like the US, Canada, Australia and China. Earlier today, Japan released a much better than expected Trade Balance but on the other hand, Current Account and Consumer Confidence Index missed the market’s forecast, pausing the JPY’s bullish momentum in the short-term. If equities continue their march upwards today, the JPY will weaken once again and the USD bulls will take back control.

Technical Analysis

The USD/JPY pulled back towards a major support area 111.40 (S1), but the trend remains bullish so a bounce from these levels is expected potentially retesting the recent highs around 111.75 (R1). However, if price breaks below 111.40 (S1) then a further weakness could likely take price towards 111.25 (S2) or even 111.15 where the 50 and the 200-day moving averages are crossing over.

Support: 111.40 / 111.25
Resistance: 111.75 / 111.9

Chart (H4)