USD/JPY Consolidates After Eclipsing 93.50

By Fast Brokers – The USD/JPY nearly hit the 93.75 level we have been pointing out for the past couple weeks, and it will be interesting to see whether the currency pair can keep the winning streak alive.  The Dollar is being hit today after a disappointing U.S. economic data set.  Both the ADP and Chicago PMI numbers disappointing, denting confidence in America’s economic recovery while effectively calming the USD/JPY’s rally.  The USD/JPY has been thriving off of a combination of strong U.S. data and a BoJ keen on fighting deflation.  Therefore, today’s setback in the U.S. is having a negative impact on the currency pair.  Japan also released negative Average Cash Earning data during the Asia session, and this doesn’t help matters either.  Speaking of data, Japan will print the Tankan Manufacturing Index tomorrow followed by Australia’s Trade Balance and China’s Manufacturing PMI.  Hence, tomorrow will give investors a good picture of how the demand for Asia’s goods is faring.  The UK and U.S. will also release their manufacturing PMIs during the Western session, meaning tomorrow could prove to be an active trading day.  Meanwhile, it will be interesting to see if the USD/JPY can continue to stabilize around its psychological 93 area despite present weakness in the Dollar across the board.

Technically speaking, the USD/JPY faces technical resistance in the form of intraday, 1/ 4 and 1/ 8 highs.  As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 3/30 and 3/25 lows.  Additionally, the psychological 92 level could serve as a solid technical cushion should it be retested.

Present Price: 93.01
Resistances: 93.05, 93.14, 93.23, 93.32, 93.43, 93.57
Supports: 92.96, 92.86, 92.75, 92.63, 92.50, 92.42
Psychological: .92, .93, 2010 highs

(click chart to enlarge)

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