{"id":5002,"date":"2009-11-27T09:13:58","date_gmt":"2009-11-27T14:13:58","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=5002"},"modified":"2009-11-27T09:13:58","modified_gmt":"2009-11-27T14:13:58","slug":"usdjpy-recovers-from-intraday-lows-after-hitting-85","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/11\/27\/usdjpy-recovers-from-intraday-lows-after-hitting-85\/","title":{"rendered":"USD\/JPY Recovers From Intraday Lows After Hitting 85"},"content":{"rendered":"

By Fast Brokers<\/strong> – The USD\/JPY has captured headlines in the FX markets after the currency pair tumbled beneath October lows and continued to head south before bottoming just below the psychological 85 level.\u00a0 As we cautioned previously, a movement below our past 1st tier uptrend line could result in an ensuing selloff, and it appears the damage may be done for now.\u00a0 The USD\/JPY registered 5000+ volume for the first time since the selloff in July 8th.\u00a0 While such a sell-side bias is certainly disconcerting, investors should also keep in mind that the USD\/JPY experienced a nearly 7% rally over the next month after hitting these July 8th levels.\u00a0 Therefore, it will be interesting to see if the USD\/JPY can stabilize from today\u2019s lows and pursue a similar rally until the end of the year.\u00a0 That being said, we will have to see how far investors decide to go with negative news from Dubai.<\/p>\n

As most investors are well aware of by now, Dubai World is requesting a debt restructuring of what could be up to $80 billion of credit.\u00a0 Although actual losses incurred are presently unknown, some European and UK banks could have considerable exposure.\u00a0 This week\u2019s news concerning Dubai\u2019s debt has shocked FX and equity markets as investors worry that the development may indicate forthcoming problems from other emerging economies.\u00a0 As a result, Asian markets have been under intense selling pressure, and European\/U.S. equities look set to open sharply lower.\u00a0 Meanwhile, the FX markets are experiencing a broad based appreciation of the Dollar and Yen as gold crashes back below $1150\/oz.\u00a0 In other words, investors have received a psychological trigger sending money towards risk averse investment vehicles.\u00a0 As one can see, investors continue to favor the Yen over the Dollar as a safe haven.<\/p>\n

While investors already preferred the Yen as a safe haven, stronger than expected data releases from Japan have only fueled the USD\/JPY\u2019s downturn.\u00a0 Japan\u2019s Trade Balance came in much stronger than expected earlier this week in addition to positive Household Spending, CPI, and Retail Sales reports late Thursday EST.\u00a0 Hence, the global economic recovery has helped Japanese exporters recover, resulting in job creation and rising personal consumption.\u00a0 A recovering Japanese economy is beneficial to the Yen and allows investors to send the USD\/JPY lower.\u00a0 Naturally, Finance Minister Fujii is upping is rhetoric concerning a looser monetary policy from the BoJ.\u00a0 Therefore, it seems the bottom set today may result from investors speculating that Japan will intervene in the currency markets should the Yen strengthen any further against the Dollar.\u00a0 After all, all-time lows are getting much closer and the BoJ\u2019s patience has to be wearing thin.\u00a0 As we recall, some major Japanese companies reliant on exports, such as Toyota, signaled that 90 is their breaking point in the USD\/JPY.\u00a0 Hence, this week\u2019s deterioration in the currency pair could put a lot of pressure on the DPJ to take action.<\/p>\n

Technically speaking, 85 appears to be the new psychological benchmark with 90 hanging far overhead.\u00a0 It\u2019s a bit troublesome to place supports on our chart right now due to limited historical reference.\u00a0 However, we can tell you that the 82.50-85 area proved to be a strong support area during the Spring\/Summer of 1995.\u00a0 Therefore, the USD\/JPY could experience similar support should the currency pair\u2019s present downturn continue.\u00a0 As for the topside, there are multiple downtrend lines serving as technical barriers as the long-term downtrend bears down on price.\u00a0 Therefore, the USD\/JPY will likely need strong support from the bulls to stage a noteworthy rally.<\/p>\n

Present Price: 86.29<\/p>\n

Resistances: 86.34, 86.57, 86.81 87.04, 87.22, 87.46<\/p>\n

Supports: 86.20, 85.99, 85.74, 85.51, 85.22, 84.84, 84.60<\/p>\n

Psychological: 85, 80, 90<\/p>\n

\"\"<\/a><\/p>\n

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

Disclaimer:<\/strong> <\/span>FastBrokers\u2019 market commentary is provided for information purposes only and under no circumstances should be regardedneither 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> <\/span>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","protected":false},"excerpt":{"rendered":"

By Fast Brokers – The USD\/JPY has captured headlines in the FX markets after the currency pair tumbled beneath October lows and continued to head south before bottoming just below the psychological 85 level.\u00a0 As we cautioned previously, a movement below our past 1st tier uptrend line could result in an ensuing selloff, and it … <\/p>\n

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