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USD/JPY eases to 116.20

FXStreet (Edinburgh) - The selling interest is growing bigger around the US dollar at the end of the NA session on Friday, pushing USD/JPY back to the 116.20/15 band.

USD/JPY weaker on profit taking

The recent steep upside in the pair prompted investors to cash up part of the advance, triggering the current correction from fresh multi-year tops just above 116.80. Upbeat momentum in the USD bolstered the upside during the European morning. However, positive results from the US Retail Sales and Consumer Sentiment failed to give the greenback further wings, fading the spike soon afterwards. In the opinion of Camilla Sutton, Chief FX Strategist at Scotiabank, “technical studies are unanimously looking for upside risk, even as the RSI at 78 is warning of overbought levels. The next level of resistance is 117. Accordingly from a purely technical perspective the risk is higher. Next week, there is a slew of important releases, including a BoJ meeting, GDP, trade and the all industry index. However, the most important element for near-term USDJPY traders to watch are developments at the weekend G20 and risk aversion”.

USD/JPY relevant levels

At the moment the pair is up 0.33% at 116.16 facing the next resistance at 116.83 (high Nov.14) ahead of 117.00 (psychological level) and then 117.20 (high Oct.17 2007). On the downside, a break below 115.72 (low Nov.14) would open the door to 115.31 (low Nov.13) and finally 115.02 (10-d MA).

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