Forex technical analysis: USDJPY mulls what to do next.

Technical Analysis

Author: Greg Michalowski | usdjpy

Initial reaction was higher, but stocks and bonds in play and they are whipping around.

The USDJPY is mulling what to do.
  • CPI showed higher inflation for the headline and core. Headline above 2.0%. Core stil below the 2.0% level at 1.8%.
  • There are excuses that the gains were because the holiday season took care of all the supply. So there was not the after Christmas sales
  • The retail sales in January were not so hot.  Weekly earnings YoY were lower at 0.4% vs 0.9% last month. No scare there.
  • Stocks fell sharply on the back of the higher prices moving from +150 Dow to -300 plus for the Dow. It is now down about -170 now (and whipping around).
  • Bond yields had the 10 year move to 2.88% but is trading at 2.86%, up 3.4 BPs.  It was down about 1 BP before the data

The USDJPY moved up to a 107.52 and back above the 2017 low at 107.315.  But we are back below that level now and just tested 107.00. The low for the day reached 106.835. That was in the Asian session and bounced off a lower trend line. That trend line is much lower now.   

There is a lot of volatility.

If I were to eye a level for a bull/bear barometer it would be the 2017 low at 107.315 area.  Stay below is more bearish. Move above and we could see more upside.  However, understand that the stocks and bond markets will be in play and that can whip sentiment around.  

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