USDJPY impressed recently with the rally pulling the pair well above 80.00 yesterday. That level is slipping this morning after more bad news out of Wall Street last night as we look for where the pair might find support.
USDJPY finally found resistance as bond yields turned back from near highs on the year. There is still a lot to like about the USDJPY chart for the bulls, but it may be tough to see consistent upside if the recent bout of risk aversion deepens and yields fall further in key bond markets. The next major pivot point for JPY crosses will likely come on the heels of next Tuesday’s BoJ meeting, where the market gauges the potential for further BoJ easing and whether that means anything for JPY strength. More important longer term may be the background negative developments in Japan’s terms of trade.
Chart: USDJPY Daily
The 80 level is obviously a major psychological pivot. Also in play here is the 200-day moving average, among other basic retracement levels.
John J Hardy,
SAXO BANK