USD/JPY bulls struggle to convince n the 113 handle
USD/JPY bulls were unable to convince n the 113 handle and the price fell into the London fix, closing London below 113 and traders in NY stayed o the sidelines after a feeble attempt to 113.06 The pair closed NY at 112.94 and was handed to the bears in a plate in Tokyo.
Traders are pressing the pair below 112.80 with a fresh low of 112.75 so far. The yen is better bid despite a strong performance in equities overnight whereby the DJIA was up 1.61%, the NASDAQ +2.52% and the S&P 500 +1.77% at the highs.
BoJ leaves yen on the defensive but things could flip
As it stands, the BoJ expects that Japan’s economy is likely to continue to expand moderately, as analysts at Rabobank explained:
"From fiscal year 2019/20 the pace of this growth is expected to decelerate. Also, the projected rate of increase in CPI inflation is somewhat lower than previously forecast, mainly for FY2018. It sees four key risks to this view. Three are related to domestic events and concern confidence in fiscal sustainability, firms’ and households’ growth expectations and the impact of the next leg of the consumption tax hike schedule in October 2019. The other risk relates to external developments, specifically US policies and protectionism, related developments in emerging markets, the impact of Brexit in addition to geopolitical risks."
Support levels: 112.60 112.35 111.95
Resistance levels: 113.40 113.85 114.25
Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows that, while technical indicators corrected extreme overbought conditions, the pair remained above its 100 and 200 SMA and hovers around 113.00, maintaining the risk skewed to the upside for the upcoming sessions