Tuesday, February 26, 2019

USD/JPY - 26 February 2019


Fundamental Highlights

The Yen found a bid in the last hours of yesterday’s session following the S&P 500 futures decline as the US-China trade optimism fades. Looking ahead, the focus remains on the sentiment in the stock markets ahead of Fed Powell's testimony. The Chairman is expected to reiterate "patience" on interest rate hikes and may offer clues on how long the Fed needs to be patient and how it plans to end its quantitative tightening program. In economic news, BoJ Core CPI missed the market’s expectation by printing 0.5% vs the 0.6% forecast, relieving a bit of the pressure from the US Dollar in the short-term.

Technical Analysis

The Dollar/Yen attempted to break above 111.10 (R1) reaching as high as 111.24 yesterday but reversed only to close below this important resistance. If price stays below 111.10 (R1) today, then a possibility of a price retracement towards 110 (S1) is on the table. The 50-day moving average (blue line) should act as the main guide for now, if price starts trading below it, then that might confirm a possible 110 (S1) retest.

Support: 110 / 109.60
Resistance:111.1 / 111.40 

Chart (H4)