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FxWirePro: USD/JPY capped below 5-DMA, bias bearish, stay short

  • Bank of Japan kept policy unchanged in line with forecasts and extended debt buying for its loan programme by 1 year.
     
  • USD/JPY saw a knee-jerk spike which was quickly faded amid widespread risk-aversion.
     
  • BoJ has also updated its outlook, kept inflation forecasts unchanged and revised up GDP.
     
  • Markets reacted negatively to the sanguine economic outlook and a downward revision of the long-run inflation forecasts.
     
  • USD/JPY rebounds sharply, edges higher from session lows at 113.25 to currently trade around 113.51.
     
  • BOJ Governor Kuroda’s presser will be in focus for further direction.
     
  • USD/JPY remains capped below 50-DMA, has broken 5-DMA on Monday, bias lower.
     
  • Major data lined up for this week include - US core PCE price index data, followed by the FOMC decision, China manufacturing PMI and US payrolls.
     

Support levels - 113.04 (double bottom Jan 25,26), 111.35 (Nov 28 low), 111.07 (38.2% Fib)
 

Resistance levels - 113.97 (23.6% Fib), 114.02 (5-DMA), 114.66 (20-DMA)
 

TIME  TREND INDEX  OB/OS INDEX    
 

1H          Bearish              Neutral       
    
4H          Bearish              Neutral       

1D          Bearish              Neutral        

1W         Bearish              Neutral  

Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-struggles-at-50-DMA-amid-wide-spread-risk-off-BOJ-in-focus-511754) has achieved TP1.

Recommendation: Bias lower, stay short for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -27.8785(Neutral), while Hourly JPY Spot Index was at 88.2828 (Bullish) at 0515 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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