{"id":11033,"date":"2010-07-12T12:55:38","date_gmt":"2010-07-12T16:55:38","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=11033"},"modified":"2010-07-12T12:55:38","modified_gmt":"2010-07-12T16:55:38","slug":"usdjpy-weakens-after-testing-89","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/07\/12\/usdjpy-weakens-after-testing-89\/","title":{"rendered":"USD\/JPY Weakens after testing 89"},"content":{"rendered":"

By Fast Brokers<\/strong> – The USD\/JPY is retreating after testing its psychological 89 level earlier in the wake of upper house elections. \u00a0The DPJ did worse than projected and confirmed Kan\u2019s declining approval rating. \u00a0The DPJ\u2019s disappointing showing means Kan must now forge a coalition in order to pass fiscal reforms aimed at reigning in Japan\u2019s spiraling deficit. \u00a0Investors reacting by selling off the yen and S&P already warned that Japan is at risk of having its debt downgraded if parliament can\u2019t pull together and pass effective measures cutting the budget deficit. \u00a0Speaking of which, parliament also rejected Kan\u2019s proposal to double the consumption tax to 10%. \u00a0The veto could prove to be a step backward in the eyes of creditors and puts Kan in the hot seat with his re-election around the corner in September. \u00a0That being said, political uncertainty could continue to linger in Japan and keep the yen from appreciating too quickly. \u00a0However, the USD\/JPY clearly faces many technical obstacles to the topside and this weekend\u2019s upper house elections have not significantly altered the currency pair\u2019s downward trajectory for the time being. \u00a0On a positive note, China\u2019s trade balance revealed a larger surplus than anticipated, indicated export demand is healthy and China\u2019s economy should continue to perform well despite government efforts to reign in real-estate prices. \u00a0Investors now turn their attention to Alcoa, which kicks off the U.S. earnings season after the bell today. \u00a0If U.S. earnings disappoint then this could weigh on the USD\/JPY and risk trade as a whole as investors head towards the yen and dollar for safety. \u00a0That being said, we\u2019ll have to see how earnings season materializes over the next week or two. \u00a0Japan will be quiet on the data wire tomorrow, though investors will receive key data points from the EU, UK, and U.S.<\/p>\n

Technically speaking, the USD\/JPY has technical supports in the form of 7\/9 and 7\/8 lows. \u00a0As for the topside, the USD\/JPY faces technical barriers in the form of intraday and 6\/25 highs. \u00a0Additionally, the highly psychological 90 level could serve as a key technical test should it be reached.<\/div>\n
<\/div>\n
Present Price: 88.67<\/div>\n
Resistances: 88.69, 88.77, 88.93, 89.23, 89.36, 89.48<\/div>\n
Supports: \u00a0 88.48, 88.37, 88.26, 88.07, 87.99, 87.86<\/div>\n
Psychological: \u00a085, 90, November 2009 lows<\/div>\n
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(click chart to enlarge)<\/p>\n

Market Commentary<\/strong><\/em> provided by Fast Brokers.<\/a><\/strong><\/p>\n

Disclaimer:<\/strong> FastBrokers\u2019 market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell\/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.<\/p>\n

Risk Disclosure:<\/strong> There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Fast Brokers – The USD\/JPY is retreating after testing its psychological 89 level earlier in the wake of upper house elections. \u00a0The DPJ did worse than projected and confirmed Kan\u2019s declining approval rating. \u00a0The DPJ\u2019s disappointing showing means Kan must now forge a coalition in order to pass fiscal reforms aimed at reigning in … <\/p>\n

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