7 Aug 2013
USD/JPY offered sub 97.00 handle
FXstreet.com (Barcelona) - USD/JPY is sub 97.00 in the opening hours of European markets as we enter London’s open.
USD/JPY dropped overnight from the top end of 97.00 , extending its losses from the middle of the 98.00 handle. Greg Gibbs, Foreign Exchange Amplifying Global FX for Asia at RBS said “the Japanese economy has lost momentum in recent months according to most indicators. Ecowatchers survey dipped in June from 56.2 to 53.6 in June, below 55.7 expected, the small business confidence index dipped from 49.6 to 49.4 in June, manufacturing PMI fell from 52.3 to 50.7 in July, Household spending fell 0.4%y/y in June, below +1.4% expected, industrial production slumped from -1.1%y/y to -4.8%y/y in June (although this was likely to be temporary with industry forecasts for a recovery in July)”.
Risk of a dovish BoJ
He continued to say “In light of the weaker Japanese data in recent months, the approaching decision on the sales tax, stronger JPY and stalled Japanese equity market, the BoJ could decide to shock the market and ease further on Thursday. Alternatively BoJ Governor Kuroda may warn they are considering such a policy move in coming meetings if the economy, assets and the USD/JPY do not pick up again soon”.
USD/JPY consolidating and levels
USD/JPY levels come in starting with the 20 dma at 99.02, 50 dma at 98.61, and the 200 dma is at 93.26. RSI (9) reads 36.60. Supports start at 96.00, 96.20, 96.74, 96.95. Spot is currently on the London open 96.90 while resistances are 97.53, 97.88, 98.05 and 98.23 Tim Riddell, Head of Global Markets Research, Asia ANZ Australia said “A constructive consolidation appears to be forming in the main driver of USD/JPY. Consolidation is likely to continue, but near term bias is to buy USD/JPY for a retest of recent highs”.
USD/JPY dropped overnight from the top end of 97.00 , extending its losses from the middle of the 98.00 handle. Greg Gibbs, Foreign Exchange Amplifying Global FX for Asia at RBS said “the Japanese economy has lost momentum in recent months according to most indicators. Ecowatchers survey dipped in June from 56.2 to 53.6 in June, below 55.7 expected, the small business confidence index dipped from 49.6 to 49.4 in June, manufacturing PMI fell from 52.3 to 50.7 in July, Household spending fell 0.4%y/y in June, below +1.4% expected, industrial production slumped from -1.1%y/y to -4.8%y/y in June (although this was likely to be temporary with industry forecasts for a recovery in July)”.
Risk of a dovish BoJ
He continued to say “In light of the weaker Japanese data in recent months, the approaching decision on the sales tax, stronger JPY and stalled Japanese equity market, the BoJ could decide to shock the market and ease further on Thursday. Alternatively BoJ Governor Kuroda may warn they are considering such a policy move in coming meetings if the economy, assets and the USD/JPY do not pick up again soon”.
USD/JPY consolidating and levels
USD/JPY levels come in starting with the 20 dma at 99.02, 50 dma at 98.61, and the 200 dma is at 93.26. RSI (9) reads 36.60. Supports start at 96.00, 96.20, 96.74, 96.95. Spot is currently on the London open 96.90 while resistances are 97.53, 97.88, 98.05 and 98.23 Tim Riddell, Head of Global Markets Research, Asia ANZ Australia said “A constructive consolidation appears to be forming in the main driver of USD/JPY. Consolidation is likely to continue, but near term bias is to buy USD/JPY for a retest of recent highs”.