How does the USDJPY pair trade currently? This and others are discussed in our latest 23 February USDJPY Fundamental Analysis. Read on to stay updated.
23 February, GKFX – USD/JPY dropped to 105.54 overnight before closing at 106.29 in NY. Currently, USD/JPY is trading at 106.87, up 0.17% on the day, having posted a daily high at 106.90 and low at 106.66.
The US yields were falling back overnight and the DXY was sent on to its backfoot weighed down also by the EUR/JPY’s proximity to the 200-D SMA at 131.14. The move was no surprise given how much the pair had been lagging behind the rest of the pairs on the back of the FOMC minutes.
US Employment Data
In terms of US data, the US initial jobless claims Feb-17: 222k (est 230k; prev r 229k). Continuing jobless claims Feb-10: 1.85m (est 1.930m; prev r 1.948m). Regardless, the DXY had been moving to the downside within a range of between 89.635 – 90.235.
Also, the US 10yr treasury yields had been paring the previous day’s gains. The three-year high was shortlived at 2.95% when the yields dropped to 2.91%. The 2yr yields, these fell from 2.27% to 2.25%. The market is currently pricing in five hikes, three in 2018 and two in 2019. (Fed fund futures yields are pricing in the chance of another rate hike in March as a cert).
Japan CPI Jan Data
In respect to Japan, the CPI Jan data arrived as follows:
- National CPI y/y: 1.4% vs expected 1.3%, prior was 1.0%.
- National CPI y/y excluding Fresh Food: 0.9% vs expected 0.8%, prior was 0.9%.
- National CPI excluding Food, Energy y/y: 0.4% vs expected 0.3%, prior was 0.3%.
23 February USDJPY Fundamental Analysis
There are option barriers between 105.00-104.00 guarding a retracement of the post-Trump rally to 101.95.
The pair is bearish according to technical readings in the 4 hours chart:
Technical indicators extended their declines to enter the negative territory, while the pair continues developing well below its moving averages. Now struggling with a Fibonacci support, the pair will have more chances of extending its decline towards its recent lows sub-106.00 on a break below the mentioned daily low.
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