By Fast Brokers – The USD/JPY is tacking onto yesterday’s downward momentum despite broad-based strength in the Dollar along with weakness in gold. Hence, it seems the USD/JPY may be declining in the face of overbought conditions following December’s impressive rally. On the other hand, strength in both the Dollar and the Yen could be a sign of investors heading for safety. Regardless, the USD/JPY is still trading well above 12/24 lows and the psychological 90 level. Therefore, the USD/JPY’s uptrend is intact for the time being. However, the FX markets should start to shake up tomorrow with the release of Services PMI data from the UK along with the much anticipated U.S. Non-Farm Employment Change number. A turnaround in U.S. unemployment triggered the Dollar’s December rally. Therefore, it will be interesting to see how the USD/JPY reacts to tomorrow’s key employment figure should it print above or below analyst expectations. Japan will be quiet in the data-wire this week, likely leaving the USD/JPY’s movements in the hands of the West.
Technically speaking, the USD/JPY overcame some notable topside barriers during the month of December, most notably the psychological 90 level and a few heavily-weighted downtrend lines. Speaking of downtrend lines, our 2nd tier downtrend line could prove to be a key barrier since it runs through August ’09 highs. Hence, an eclipse of our 2nd tier could potentially yield a medium-term run towards the 97.50 area. Meanwhile, the USD/JPY faces multiple downtrend lines along with September highs and the psychological 95 zone. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 12/24 and 12/21 lows. Furthermore, the psychological 90 area could serve as a suitable cushion should it be tested.
Present Price: 91.55
Resistances: 91.83, 92.03, 92.26, 92.46, 92.76, 92.96
Supports: 91.46, 91.28, 91.11, 90.94, 90.78, 90.46
Psychological: 95, 90, January and September Highs
Market Commentary provided by Fast Brokers.
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