21 Aug 2013
USD/JPY eye's FOMC Minutes
FXstreet.com (Barcelona) - USD/JPY moved higher into the European open having been attracting bids on the drop from 97.50 to below 97.20 support.
Gareth Berry at UBS FX strategy had said that the US-Japan bond spread continues to widen in favour of USDJPY upside. “We look for more spread widening over the months ahead, as the Fed begins the process of QE3 tapering while the Bank of Japan continues to lean heavily on the JGB curve”. He continued, “Is the current pace of BoJ buying sufficient to support the JGB market in the face of an even more aggressive UST selloff? Yes, we believe so. It has now been over four months since BoJ Governor Kuroda unveiled his QQE policy on April 4th, and enough time has passed to allow a meaningful comparison between the pace of JGB issuance by the Ministry of Finance and the pace of JGB purchases by the BoJ…there is plenty USDJPY still to come. Our 3m USDJPY forecast stands at 105”.
FOMC Minutes
However, the key focus today will clearly be the minutes from the July 30-31 FOMC as the market looks for signals in timing and scale of the Fed’s plans to taper its current QE policy.
USD/JPY Levels with a bullish bias
The 20 DMA is 97.77, 50 DMA is 98.35, and the 200 DMA is 94.12. RSI (9) reads 45.29. Supports are ascending from 95.81, 95.92, 96.40, 96.88. Spot is currently 97.53 and resistances are 97.89, 98.13 and 98.28 and at 98.67, a close above this would extend the recent strength to 99.95 and then 101.53.
Gareth Berry at UBS FX strategy had said that the US-Japan bond spread continues to widen in favour of USDJPY upside. “We look for more spread widening over the months ahead, as the Fed begins the process of QE3 tapering while the Bank of Japan continues to lean heavily on the JGB curve”. He continued, “Is the current pace of BoJ buying sufficient to support the JGB market in the face of an even more aggressive UST selloff? Yes, we believe so. It has now been over four months since BoJ Governor Kuroda unveiled his QQE policy on April 4th, and enough time has passed to allow a meaningful comparison between the pace of JGB issuance by the Ministry of Finance and the pace of JGB purchases by the BoJ…there is plenty USDJPY still to come. Our 3m USDJPY forecast stands at 105”.
FOMC Minutes
However, the key focus today will clearly be the minutes from the July 30-31 FOMC as the market looks for signals in timing and scale of the Fed’s plans to taper its current QE policy.
USD/JPY Levels with a bullish bias
The 20 DMA is 97.77, 50 DMA is 98.35, and the 200 DMA is 94.12. RSI (9) reads 45.29. Supports are ascending from 95.81, 95.92, 96.40, 96.88. Spot is currently 97.53 and resistances are 97.89, 98.13 and 98.28 and at 98.67, a close above this would extend the recent strength to 99.95 and then 101.53.