Looks like markets are waiting to see how the US sets its stall out today before taking sides.
USD/JPY finally pulled up late in the European day ahead of 101.50 and January support at 101.46.
USD/JPY daily chart 09 04 2014
Despite the big drop over the last couple of days we are still within the current short term ranges and as I said yesterday, there’s no real reason why we should see them break. The bounce in USD/JPY comes as the Nikkei had a bad day so that’s a sign that we’ve over-extended the moves.
On the short term front the Feb 2013 support line is marking the bottom today and the 55 and 100 dma’s are likely to feature more so than they did yesterday.
Be wary of the market if it starts to look expectant leading up towards tonights FOMC minutes release. I, for one, don’t see us getting anything shocking coming out so I’ll be very wary of any big upside moves running into it. If anything I see a risk that the minutes debunk the excitement over when interest rates will rise and that is likely to hit the dollar.
With the calendar light of data again we’re going to be on stock and bond watch once again.
