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25 Apr 2016
USD/JPY: minor profit taking before big events
USD/JPY is subdued in Tokyo with the Nikkei 225 down -0.2% and marginally negative after a mixed close on Wall Street on Friday.
Last week, there were big gains for USD/JPY bulls at the end of last week when the price moved up from 110.26 to a handful of pips shy of the 112 handle following BOJ's announcement that policy makers have been discussing negative-rate loans for financial institutions as well as another rate cut.
For the week ahead, traders could be cautious as we head towards major risk events in both the BoJ and FOMC. The main theme is not so much with the Fed right now, who are not expected to act this week, but specifically considering these recent announcements from the Japanese officials. We are seeing some profit taking here following Friday's surge down towards the 20 sma on the 1hr sticks.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that the price is well below a bearish 100 DMA, currently around 114.35, and it will take a recovery beyond this last to see a more sustainable recovery in term. "In the 4 hours chart, the price accelerated sharply higher and stands now above its 100 and 200 SMAs, whilst the technical indicators are giving some signs of upward exhaustion within extreme overbought territory, not enough, however, to suggest a downward corrective movement ahead."
Last week, there were big gains for USD/JPY bulls at the end of last week when the price moved up from 110.26 to a handful of pips shy of the 112 handle following BOJ's announcement that policy makers have been discussing negative-rate loans for financial institutions as well as another rate cut.
For the week ahead, traders could be cautious as we head towards major risk events in both the BoJ and FOMC. The main theme is not so much with the Fed right now, who are not expected to act this week, but specifically considering these recent announcements from the Japanese officials. We are seeing some profit taking here following Friday's surge down towards the 20 sma on the 1hr sticks.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that the price is well below a bearish 100 DMA, currently around 114.35, and it will take a recovery beyond this last to see a more sustainable recovery in term. "In the 4 hours chart, the price accelerated sharply higher and stands now above its 100 and 200 SMAs, whilst the technical indicators are giving some signs of upward exhaustion within extreme overbought territory, not enough, however, to suggest a downward corrective movement ahead."