By Fast Brokers – Investors are biting on the USD/JPY after U.S. Existing Home Sales beat analyst expectations. The USD/JPY’s about face shows the level of uncertainty surrounding the viability of the Dollar. Investors are suddenly more comfortable buying the Dollar after a series of positive global economic data. However, the USD/JPY still clearly faces significant downward pressure, and it will take more than one session of data to turn things around. On the other hand, we’re sure it’s comforting for the BOJ to see the USD/JPY forming some sort of bottom as the currency pair tries to get back to its psychological 95 level. Meanwhile, the S&P futures and leapt to fresh 2009 highs, a positive development for the concept of a global economic recovery. We will have to monitor whether the S&P futures can separate themselves further from their highly psychological 1000 level. If so, the USD/JPY may be inclined to follow U.S. equities higher as investors cautiously return to risk.
Technically speaking, the USD/JPY’s obstacles to the topside are our 3rd tier downtrend line and the psychological 95 level. We created a near 1st tier uptrend line running through July’s bottom. Our 2nd tier uptrend line is approaching its inflection point with our 3rd tier downtrend line, indicating volatility could escalate. The trend collision could be positive for the USD/JPY since the currency pair’s momentum is in favor of the bulls today.
Present Price: 94.61
Resistances: 94.71, 94.95, 95.26, 95.44, 95.96
Supports: 94.36, 94.08, 93.88, 93.65, 93.42
Psychological: 95
Market Commentary provided by Fast Brokers.
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