Back
14 Aug 2013
USD/JPY rips higher on weak Japanese data and US tapering talk
FXstreet.com (Barcelona) - The USD/JPY rallied hard Tuesday and appears to have finally started to trade more “intuitively” on the idea that the FOMC will be able to go hawkish sooner than the BOJ.
Light data flow highlights logic once again – with a dash of technicals
The USD/JPY rallied sharply Tuesday partly on BOJ / Abe talk of corporate tax cuts and weak Japanese data, partly on so-so US data, but mostly on talk of the FOMC starting their tapering program sooner than later.
Wednesday, traders will try to focus on the US Producer Price Index and Japanese data on foreign purchases of their securities – instead of only focusing on taper talk. However, rather than only attributing the daily movements of the USD/JPY (and other crosses) only to the recent “tapering” obsession, the truth may be as simple – and logical – as deducing which side of a currency pair is more likely to scale back or remove their monetary stimulus first. Right now, the US bankers have the clear lead in that category – unless Bernanke decides to step-in the throw another curveball as he did in early July.
Technical outlook for USD/JPY
Technicians are mixed on the short-term outlook for the USD/JPY. Some are lined up with the logicians and calling for a resumption in the macro uptrend. Others are still calling for a move down to the 92.50 – 92.60 range before resuming the macro uptrend. Short-term resistance comes in at 98.75 (Fibonacci projection) and is followed by the 8/1 close at 99.54. Short-term support comes in at 97.57 and is followed up by 96.00 - both of which are horizontal lines of support.
Light data flow highlights logic once again – with a dash of technicals
The USD/JPY rallied sharply Tuesday partly on BOJ / Abe talk of corporate tax cuts and weak Japanese data, partly on so-so US data, but mostly on talk of the FOMC starting their tapering program sooner than later.
Wednesday, traders will try to focus on the US Producer Price Index and Japanese data on foreign purchases of their securities – instead of only focusing on taper talk. However, rather than only attributing the daily movements of the USD/JPY (and other crosses) only to the recent “tapering” obsession, the truth may be as simple – and logical – as deducing which side of a currency pair is more likely to scale back or remove their monetary stimulus first. Right now, the US bankers have the clear lead in that category – unless Bernanke decides to step-in the throw another curveball as he did in early July.
Technical outlook for USD/JPY
Technicians are mixed on the short-term outlook for the USD/JPY. Some are lined up with the logicians and calling for a resumption in the macro uptrend. Others are still calling for a move down to the 92.50 – 92.60 range before resuming the macro uptrend. Short-term resistance comes in at 98.75 (Fibonacci projection) and is followed by the 8/1 close at 99.54. Short-term support comes in at 97.57 and is followed up by 96.00 - both of which are horizontal lines of support.