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USD/JPY starts to doubt the dollar dominance

FXStreet (Moscow) - USD/JPY retreated from Asian highs around 109.50 to low at 109.18, but managed to resume the rise, currently rebounding to 109.40 area.

What about retreat?

The pair has showed an impressive rally yesterday, refreshing multi-year highs. However, the unstoppable move of the USD may be stopped by the exaggerated expectations on the US economy strength. The market started to price-in earlier than expected rate hike based on stable economic recovery. Nevertheless, any disappointment from first-tier report may reverse the move, and trigger a broad retreat. Today the market is focused on Consumer Sentiment, where slight rise of the indicator is expected. If report comes below forecasts, we may see a sell-off with initial target at 108.83 support.

What are today’s key USD/JPY levels?

Today's central pivot point can be found at 109.46 with support below at 109.16, 108.83 and 108.53 with resistance above at 109.80, 110.10 and 110.43. Hourly Moving Averages are bullish, with the 200SMA bullish at 108.94 and the daily 20EMA bullish at 107.54. Hourly RSI is bearish at 49.

Pause before focus shifts back to US data, Fed cycle – Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that the dollar’s record-breaking advance has been interrupted by month and quarter-end, which have prompted some position-squaring and a bounce this morning, notably in the Australian and New Zealand dollars.
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