Friday, April 26, 2019

USD/JPY - 26 April 2019


Fundamental Highlights

The Dollar/Yen closed negatively yesterday, despite the greenback’s dominance across the board. Equities plunged at the open after BOJ left its monetary policy unchanged as expected. But for the first time, Governor Kuroda clarified that they will keep rates low for a very long time, at least until spring 2020, but the time-frame could be much longer than that if the economy weakens. The Dollar found support later in the day after equities recovered and helped the pair bounce and settle around 111.60. Earlier this morning, the demand on Yen was halted after Japan released mixed economic data. Unemployment rate ticked above expectations and the Industrial Production fell much more than previously expected. However, Tokyo CPI and Retail Sales, both came better than the forecast.

Technical Analysis

The Dollar/Yen closed just above the 111.50/60 critical level. A break below this area could invalidate the inverted H&S pattern and shifts the momentum to the bears’ side. Price is currently stuck between 2 key levels; 112.30 (R2) and 111.50 (S1). Traders will be waiting for a break to either side to reassess their positions. Price action favors the bears for now, so a successful break below 111.50 (S1) could weaken the pair towards 111.25 (S2).

Support: 111.50 / 111.25
Resistance: 112 / 112.30

Chart (H4)