The USDJPY has had an up and down day in trading today.
Earlier today, BOJ Kuroda gave a speech and made comments afterwards. Specifically, he said:
- The excessively strong again is being corrected.
- The US economy is expanding smoothly and its monetary policy is in the last phase of tapering
- Under those circumstances, it’s in a way, natural that the dollar rise and the yen fall slightly
- The yen’s weakness vs. the dollar is not particularly negative for Japan’s economy
- Does not see negative rates as a large problem
- Will make adjustments if downside risks to 2% price target up here.
- CPI around 1% level doesn’t mean easing effects waning
Kuroda’s comments keep the door open for future easing/stimulus but he is not yet convinced. Hence there was no push to and through the highs reached over the last few days.
USDJPY below strong ceiling. Creating a strong support at 100 hour MA (blue line) too.
From a technical perspective, the USDJPY has moved a touch lower in trading today. As mentioned, the ceiling at the 107.37 area remains in place (see post from yesterday at https://www.forexlive.com/blog/2014/09/15/technical-analysis-usdjpy-creates-a-ceiling-and-moves-lowerseptember-15-2014/ ) .
Now with the consolidation , the 100 hour moving average(blue line in the chart above) is in play and being tested at the 107.06 level currently. Today alone, there have been 8 hourly bars where the price has traded below this moving average. However, there have been no closes below the level …yet.
Needless to say, the resistance above at the 107.37 area is strong. Now, the 100 hour moving average is putting up its own fight at support.
At some point we will get the break. On a move lower the next corrective targets would come in at the 106.85 bottom trend line, the 106.63/64 (lows form September 11) and the 106.345 area where the 38.2% and the 200 hour MA (green line is currently located). The price has not traded below the 200 hour moving average since August 15. As a result, I would expect good buyers against this level on the 1st test. The bias remains supportive of the USDJPY still. So I do expect strong support levels like the 106.34 level (with 38.2 and 200 hour MA) to put up a good fight.
On the topside, a move above the 107.37 level opens up the door for a further trend move higher. The price will be once again making new six-year highs. Long-term, traders will be looking toward the 110.00 – 110.67 area (high price from 2008). It is not out of the question especially if the tone from the BOJ remains conducive to more stimulus. Right now they are still in the “open to the idea” mindset.
USDJPY weekly chart is showing strong resistance against the 107.37 trend line. A move above targets 110.00 and 110.67 (high from 2008.)
