The Japanese yen plummets as the US dollar soars past the Fed and the BoJ. Where to find USD/JPY?
Crude Oil, US Dollar, USD/JPY, Hang Seng, Euro, AUD, NZD, CAD, Fed Talking Points
- Japanese yen continues to weaken across the board as USD strengthens
- Stock markets are all under pressure as Chinese tech names come under scrutiny
- Commodities have seen a lull as all eyes are on the Fed. Obad usd/JPY continues?
The Japanese yen hit a 5-year low against the US dollar today ahead of meetings of the two countries’ central banks. While the Fed has 25 basis points, the Bank of Japan is expected to keep rates unchanged.
Overnight, the headline CPI in the US hit expectations at 7.9% yoy at the end of February. This is the highest figure since January 1982, which further argues in favor of a tightening of monetary policy.
In a show of bipartisan support, the US Senate passed a US$1.5 trillion funding bill that avoids any government shutdown and provides US$13.6 billion in aid to Ukraine.
Wall Street ended its session for the day slightly lower and APAC stocks followed the lead with a sea of red on Asian indices.
Hong Kong’s Hang Seng Technology Index led the charge south, down nearly 9% at one point.
Concerns about regulatory issues are growing as the Securities Exchange Commission (SEC) has identified 5 Chinese tech companies that could face delisting in the United States if they fail to meet regulatory standards.
In Asia today, the euro clawed back some of yesterday’s losses after the European Central Bank surprised markets with a hawkish tone at their meeting.
The AUD, CAD and NZD joined the yen lower as risk sentiment overwhelmed commodity-based currencies.
Commodity markets have had a relatively quiet day so far in Asia. WTI crude is near US$107 billion and Brent is hovering around US$110 billion at the time of writing. Gold is stable at US$1,986 an ounce.
There are a number of ECB speakers today and later Canada will see jobs data. The United States will get the sentiment survey from the University of Michigan.
The full economic calendar can be viewed here.
USDJPY Technical Analysis
Trading at a 5-year high, a bullish momentum seems to be unfolding for USD/JPY. The short, medium and long term simple moving averages (SMA) are all below price and exhibit positive gradients. This is illustrated by the 10, 55 and 100 day SMAs.
Support may be seen at the breakout point of 116.353 or at the 10-day SMA, currently at 115.505.
On the upside, resistance could be the January 2017 high at 118.608 or the rising trendline below, which currently crosses at 118.10.
— Written by Daniel McCarthy, Strategist for DailyFX.com
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter