The Japanese Yen (JPY) ticks higher against its American counterpart during the Asian session on Wednesday, albeit it lacks any follow-through buying and remains close to a three-month low touched this week. Fears that Japanese authorities will intervene in the market to prop up the domestic currency turn out to be a key factor lending some support to the JPY. That said, the upside remains capped in the wake of the uncertainty over the Bank of Japan's (BoJ) rate-hike plans.
Investors now seem convinced that the loss of the parliamentary majority by Japan's ruling coalition could make it difficult for the BoJ to tighten its monetary policy further. Adding to this, the prevalent risk-on environment contributes to capping gains for the safe-haven JPY. Furthermore, the emergence of some US Dollar (USD) dip-buying acts as a tailwind for the USD/JPY pair as traders await the crucial BoJ decision and key US macro data this week for a fresh impetus.
From a technical perspective, last week's breakout through the 150.65 confluence – comprising the 100-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the July-September downfall – was seen as a fresh trigger for bulls. That said, this week's repeated failures to find acceptance or build on the momentum beyond the 61.8% Fibo. level warrants some caution. Moreover, the Relative Strength Index (RSI) on the daily chart remains close to the overbought zone, making it prudent to wait for some near-term consolidation or a modest pullback before positioning for further gains.
Any subsequent slide below the 153.00 mark, however, is likely to find some support near the overnight swing low, around the 152.75 region, ahead of the 152.40 area, or the weekly through. Some follow-through selling could drag the USD/JPY pair to the 152.00 mark en route to the 151.45 support and the 151.00 mark. The downward trajectory could extend further towards challenging the 150.65 confluence resistance breakpoint, which should now act as a key pivotal point and a strong base for spot prices.
On the flip side, the 153.85-153.90 region now seems to have emerged as an immediate strong barrier. A sustained strength beyond, leading to a breakout through the 154.00 mark, could lift the USD/JPY pair beyond the 154.35-154.40 supply zone, towards reclaiming the 155.00 psychological mark. Spot prices could eventually climb to test the late-July swing high, around the 155.20 region.
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.01% | 0.12% | -0.06% | 0.04% | 0.32% | 0.30% | 0.00% | |
EUR | -0.01% | 0.12% | -0.07% | 0.03% | 0.30% | 0.29% | -0.01% | |
GBP | -0.12% | -0.12% | -0.20% | -0.09% | 0.19% | 0.17% | -0.10% | |
JPY | 0.06% | 0.07% | 0.20% | 0.09% | 0.37% | 0.34% | 0.06% | |
CAD | -0.04% | -0.03% | 0.09% | -0.09% | 0.27% | 0.26% | -0.02% | |
AUD | -0.32% | -0.30% | -0.19% | -0.37% | -0.27% | -0.01% | -0.30% | |
NZD | -0.30% | -0.29% | -0.17% | -0.34% | -0.26% | 0.01% | -0.28% | |
CHF | -0.00% | 0.00% | 0.10% | -0.06% | 0.02% | 0.30% | 0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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