{"id":9884,"date":"2010-06-01T10:12:38","date_gmt":"2010-06-01T14:12:38","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9884"},"modified":"2010-06-01T10:12:38","modified_gmt":"2010-06-01T14:12:38","slug":"usdjpy-shrugs-following-negative-china-developments","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/06\/01\/usdjpy-shrugs-following-negative-china-developments\/","title":{"rendered":"USD\/JPY Shrugs Following Negative China Developments"},"content":{"rendered":"

By Fast Brokers<\/strong> – The USD\/JPY is sinking back towards 90 as investors divest from the risk trade with the EUR\/USD tumbling below May lows.\u00a0 Hence, despite problems in Japan\u2019s government, the Yen is flexing its status as a safe haven once again.\u00a0 Hatoyama has hinted that he is considering stepping down as 60% of voters say they want him to resign.\u00a0 Though the possibility of a breakdown in Japan\u2019s government is eroded a bit if the Yen\u2019s value as a safe haven, the USD\/JPY\u2019s negative correlation with the risk trade doesn\u2019t seem to be under threat for the time being.\u00a0 However, investors should keep a closer eye on Japan\u2019s news wire for any new developments regarding Hatoyma.\u00a0 Meanwhile, analysts are clamoring over the slowdown in Chinese manufacturing, which could in term deliver a blow to Japan\u2019s shaky manufacturing base.\u00a0 Li Daokui, a member of China\u2019s central bank policy committee, suggested that China\u2019s property bubble could be worse than America\u2019s due to the possibility of social unrest.\u00a0 For further analysis on this topic, you can read my blog post last week \u2018Year of the Tiger\u2019 at www.blogs.fastbrokers.com\/matthew.\u00a0 In addition to negative developments in China, the EU is being hit by a fresh set of psychological headwinds after the ECB announced it expects EU banks to writedown another $240 billion in losses.\u00a0 European equity markets are under pressure today in wake of the news and U.S. equity futures are in the red as well.\u00a0 Investors are currently waiting on America\u2019s manufacturing PMI figure, and it will be interesting to see whether the USD\/JPY can avoid a retest of 90 should the EUR\/USD\u2019s downturn accelerate.<\/p>\n

Technically speaking, the USD\/JPY still faces multiple downtrend lines along with 5\/19 and 5\/31 highs and psychological 92 level.\u00a0 As for the downside, the USD\/JPY has technical supports in the form of multiple uptrend lines along with 5\/26 lows.\u00a0 Additionally, the highly psychological 90 level should serve as a solid technical support should it be tested.<\/p>\n

Present Price: 90.75
\nResistances: 90.77, 90.88., 91.03, 91.26, 91.50, 91.67
\nSupports:\u00a0 90.64, 90.55, 90.35, 90.20, 90.11, 89.99, 89.79
\nPsychological:\u00a0 .90, .92, May lows<\/p>\n

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

(click chart to enlarge)<\/p>\n

Market Commentary<\/strong><\/em> provided by Fast Brokers<\/strong>.<\/a><\/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","protected":false},"excerpt":{"rendered":"

By Fast Brokers – The USD\/JPY is sinking back towards 90 as investors divest from the risk trade with the EUR\/USD tumbling below May lows.\u00a0 Hence, despite problems in Japan\u2019s government, the Yen is flexing its status as a safe haven once again.\u00a0 Hatoyama has hinted that he is considering stepping down as 60% of … <\/p>\n

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