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13 Jun 2013
USD/JPY erases 50% daily losses and regains 95.00
FXstreet.com (Barcelona) - The USD/JPY is gaining fresh new ground at the NY close, moving from weekly lows sub-94.00 all the up to 95.22, highest since last Asian session sell-off.
Further work to be done to improve bull picture
Despite the recovery in USD/JPY, erasing in the process over 50% of today's measured slide, the impulsiveness of the bear moves does not allow technicals to paint an improved picture for the interest of the buyers. In order for the landscape to change, key levels have to be regained, with 95.70/80 first tough resistance (sequence of lows on H4 chart since April 5) ahead of critical level at 97.00, which if broken, would mean taking out a major swing high to significantly upgrade the bullish stance.
Stock support the pick up in USD/JPY
After the chaotic and disorderly fall from the Nikkei 225 yesterday, with the index falling beyond the 6% mark at one point, the benchmark Nikkei futures are in the middle of a vigorous rebound, up over 500 points after the 800+ point drop. That change in sentiment, coupled with the S&P 500 up more than 1% having printed a double bottom around 1,600, is all adding up to the current short term bullish sentiment in USD/JPY.
Japan to wait until USD/JPY shorts build up further?
The BoJ likes to wait for short USD/JPY positions to build up before verbally or physically intervening to get the most bang for their buck, says Kathy Lien, Co-Founder at BKAssetManagement. At 95, Lien thinks "many investors may have abandoned their long USD/JPY positions but at 90-92, we may start to see some investors short the currency and that is what the BoJ wants to see." Kathy has the suspicion that the Japanese government will remain stubborn and that no 'USD/JPY positive' jawboning from politicians may be heard just yet.
Further work to be done to improve bull picture
Despite the recovery in USD/JPY, erasing in the process over 50% of today's measured slide, the impulsiveness of the bear moves does not allow technicals to paint an improved picture for the interest of the buyers. In order for the landscape to change, key levels have to be regained, with 95.70/80 first tough resistance (sequence of lows on H4 chart since April 5) ahead of critical level at 97.00, which if broken, would mean taking out a major swing high to significantly upgrade the bullish stance.
Stock support the pick up in USD/JPY
After the chaotic and disorderly fall from the Nikkei 225 yesterday, with the index falling beyond the 6% mark at one point, the benchmark Nikkei futures are in the middle of a vigorous rebound, up over 500 points after the 800+ point drop. That change in sentiment, coupled with the S&P 500 up more than 1% having printed a double bottom around 1,600, is all adding up to the current short term bullish sentiment in USD/JPY.
Japan to wait until USD/JPY shorts build up further?
The BoJ likes to wait for short USD/JPY positions to build up before verbally or physically intervening to get the most bang for their buck, says Kathy Lien, Co-Founder at BKAssetManagement. At 95, Lien thinks "many investors may have abandoned their long USD/JPY positions but at 90-92, we may start to see some investors short the currency and that is what the BoJ wants to see." Kathy has the suspicion that the Japanese government will remain stubborn and that no 'USD/JPY positive' jawboning from politicians may be heard just yet.