The yen continues to surprise the dollar. For the seventh consecutive day the Japanese yen performs better than the greenback. During the last session the dollar lost another 52 pips from its account. Early in the morning one dollar traded for 111.78 yen, and within minutes there was registered daily high at 111.79 yen per dollar. There was a long and convincing decline and after breaking the first support level at 111.20, bears took its bottom at exchange rate of 110.73. Bulls found the strength to return the rate to the level of 111.26.
USDJPY is losing 0.12% at 111.03 and a drop below 110.63 (low Mar.23) would aim for 109.91 (50% Fibo of the November-December rally) and finally 108.18 (200-day sma). On the other hand, the next up barrier is located at 111.77 (high Mar.22) ahead of 112.88 (high Mar.21) and then 113.38 (20-day sma).
USD/JPY marks a week of depreciation as the pair went from 113 to below 111. Lowest low was made yesterday at 110.60, price is now slightly recovered trading at 111.23. I'm expecting a move up for the next week.
Instead of trading sideways as expected, USD dipped to a low of 110.60 before recovering. While downward momentum is not strong, the undertone is still negative and USD is expected to grind lower towards 110.50. Resistance is at 111.30 but only a move back above 111.65 would indicate the start of a more sustained recovery. We still view the current decline as severely over-extended but with no signs of stabilization just yet, another push lower towards 110.00 cannot be ruled out (even though the odds for such a move are not high). All in, the current downward pressure would ease only if USD can move and stay above 112.00.
At the moment USD/JPY is losing 0.88% at 110.35 and facing the first resistance at 110.60 (daily high) followed by 111.00 and 111.50 (Mar. 24 high). On the downside, a break below 110.10/00 could target 109.35 (Nov. 15 high) and 108.75 (Nov. 17 low).
Momentum above session peak resistance near 110.80 level could get extended towards the 111.00 handle, above which a fresh bout of short-covering has the potential to lift the pair 111.30-35 resistance area ahead of 111.60-65 strong hurdle. On the downside, renewed weakness below mid-110.00s would turn the pair vulnerable to head back towards multi-month lows support near 110.10 support before eventually dropping to 109.70 support.
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