Wednesday, February 21, 2018
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USD/JPY: bearish below 100-D SMA ahead of BoJ this week
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  • USD/JPY Bulls unable to get above 100-D SMA.
  • USD/JPY traders turn to BoJ this week.

In a day of no data in Asia, the market is quiet and USD/JPY is stationary in Tokyo around the closing prices for Friday. Currently, USD/JPY is trading at 110.63 with a high of 11.85 and a low of 110.51.

Contained by the 10-D SMA, USD/JPY is consolidating the recent losses that occurred last week from 111.48 to aforementioned lows today despite strong US Treasury yields that climbed to their highest since September 2014. The 10-year yields finished up on Friday at 2.64% having ranged between 2.61% and 2.66%. Also, the US government shutdown was a thorn in the Bull’s hooves while we await the outcome of this week’s BoJ.

Special update: US Government officially shut down

BoJ on the cards this week

“The Bank of Japan also meets this week and under current term, this will be Kuroda’s last quarterly ‘outlook’ meeting. The BoJ Governor is likely to send a message that official interest rates are going nowhere just yet. With neither central bank likely to signal policy changes this week, further US$ weakness may be averted,” explained analysts at Westpac.

USD/JPY levels

USDJPY: A neutral stance is required

Valeria Bednarik, chief analyst at explained that the technical indicators in the mentioned chart turned lower within bearish territory after correcting oversold conditions, all of which keeps the risk lean towards the downside. Shorter term, and in the 4 hours chart, the price remains well below bearish 100 and 200 SMAs, while the Momentum indicator bounces from its mid-line as the RSI heads higher around 50, all of which limits chances of a decline, unless it breaks  through 110.60, now the immediate support, heading then towards the 109.85 region a long-term static support area.

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