25 Aug 2015
USD/JPY: bulls scrumming down on 119 handle
FXStreet (Guatemala) - USD/JPY is currently trading at 119.64 with a high of 120.40 and a low of 118.24
As choppy as the major is on the 119 handle, USD/JPY has found some traction here at least and is moving in a narrower range as markets start to consolidate on the latest developments in global financial markets. The price has been targeting the 120 handle and recovering as the PBoC made a surprise move in US markets which has underlined the recovery that start din the European session.
PBoC supports USD/JPY
The PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%. The move supports risk sentiment and offers in the Yen accelerated from the mid point of the 119 handle.
US data is the key for USD/JPY
The US data today was also positive for the greenback with the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4. This has underpinned the strength in USD/JPY whilst better than expected Services PMI was arriving also at 55.2 vs. consensus at 55.1. New home Sales less positive news as it missed expectations coming in at 0.507m vs 0.520m consensus. We now look ahead to tomorrow's round up of data events for the US economy. We have the US Durable Goods as well as Fed's Dudley speaking.
USD/JPY Fed hike expectations put back, weighs on USD/JPY
We had some hawkish rhetoric from Lockhart yesterday where he indicated that the Fed hikes should commence this year. Although there is a change in sentiment in the air, possibilities of a hike this year have reduced to 50:50 and some economists are not even so sure that a hike will come this year at all which should continue to weigh on USD/JPY going forward.
USD/JPY upside looks limited
Technically, Karen Jones, chief analyst at Commerzbank explained, "The rebound is indicated to terminate 120.30-1121.30 and this will leave the market exposed on the downside. Below 115.14 lies the 23.6% retracement of the entire move up from the 2011 low – this is located at 113.98. We do anticipate that the market will hold just ahead of here for some consolidation at least."
As choppy as the major is on the 119 handle, USD/JPY has found some traction here at least and is moving in a narrower range as markets start to consolidate on the latest developments in global financial markets. The price has been targeting the 120 handle and recovering as the PBoC made a surprise move in US markets which has underlined the recovery that start din the European session.
PBoC supports USD/JPY
The PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%. The move supports risk sentiment and offers in the Yen accelerated from the mid point of the 119 handle.
US data is the key for USD/JPY
The US data today was also positive for the greenback with the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4. This has underpinned the strength in USD/JPY whilst better than expected Services PMI was arriving also at 55.2 vs. consensus at 55.1. New home Sales less positive news as it missed expectations coming in at 0.507m vs 0.520m consensus. We now look ahead to tomorrow's round up of data events for the US economy. We have the US Durable Goods as well as Fed's Dudley speaking.
USD/JPY Fed hike expectations put back, weighs on USD/JPY
We had some hawkish rhetoric from Lockhart yesterday where he indicated that the Fed hikes should commence this year. Although there is a change in sentiment in the air, possibilities of a hike this year have reduced to 50:50 and some economists are not even so sure that a hike will come this year at all which should continue to weigh on USD/JPY going forward.
USD/JPY upside looks limited
Technically, Karen Jones, chief analyst at Commerzbank explained, "The rebound is indicated to terminate 120.30-1121.30 and this will leave the market exposed on the downside. Below 115.14 lies the 23.6% retracement of the entire move up from the 2011 low – this is located at 113.98. We do anticipate that the market will hold just ahead of here for some consolidation at least."