By Fast Brokers – The USD/JPY logged solid gains over the past 24 hours with the risk trading getting a boost from a positive reaction to Obama’s State of the Union. Furthermore, the Fed’s commitment to a loose monetary policy helped fuel the risk trade. Meanwhile, Japan released weaker than expected Retail Sales data, leading investors to prefer the Dollar over the Yen. However, the USD/JPY is relinquishing some of its gains as the risk trade gets knocked by more negatively mixed U.S. economic data. Weekly Unemployment Claims printed higher than analyst expectations, adding onto yesterday’s disappointing New Home Sales number. Furthermore, Durable Goods Orders came in weaker than expected while the Core DGO number surpassed expectations. This tells us that although consumption is improving, demand for autos is waning. Such a development could be negative news for Japanese manufacturers especially considering all of the recalls Toyota is making right now. Meanwhile, Japan will release a large set of data during tomorrow’s Asia trading session, including Household Spending, CPI, Prelim Industrial Production, and meeting minutes from the BoJ’s policy meeting this week. Investors will be looking to see whether the BoJ hinted at any inclination to loosen liquidity to fight deflationary forces. Furthermore, during the U.S. trading session investors will receive Prelim GDP data. Hence, the USD/JPY could remain very active as the trading week comes to a close.
Technically speaking, the USD/JPY has multiple uptrend lines serving as technical cushions along with 1/22 and 1/26 lows. As for the topside, the USD/JPY faces multiple downtrend lines along with intraday and 12/18 highs. Furthermore, the .90 area could continue to have a psychological influence on the USD/JPY over the near-term.
Present Price: 90.06
Resistances: 90.22, 90.39, 90.57, 90.75, 90.90, 91.05
Supports: 89.95, 89.72, 89.55, 89.36, 89.21, 89.02
Psychological: 90, January highs and lows
Market Commentary provided by Fast Brokers.
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