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USD/JPy better bid ahead of Kuroda

FXStreet (Guatemala) - USD/JPY is currently trading at 123.21 with a high of 123.24 and a low of 123.14. The major unit is supported in the opening hour of Tokyo in an exceptionally quiet start to what looks to be a non eventful week ahead. The focus left for the month stays with the FOMC and Fed interest rate decision while the greenback was supported on the jobs data, moving back onto the 123 handle against the Yen from lows of 122.29 post ECB.

We have Bank of Japan governor Kuroda speaking although it is highly unlikely that we will hear anything different than downside risks exist but the underlying inflation in the Japanese economy is moving higher and hence no action is required. The driver in the major comes in the slightly firmer close in the dollar while analysts at Brown Brothers Harriman explained that they suspect that the slippage in the 10-year bond differential and an upward revision to Q3 GDP estimates (from a small contraction to a small expansion) may help reinforce the ceiling.

The analysts went on to explain the recent price action in USD/JPY remains within the MA's. "From late-August through earl-November, the dollar was confined to a JPY118.00-JPY122.00 range. After testing the lows in late October, the dollar began to trend higher. First to the upper end of the range and through that. It has entered into a new trading range over the past month: JPY122.00-JPY124.00."

USD/JPY levels

Technically, Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that the pair trades in a well-defined range between 122.20 and 123.75, holding above its 100 and 200 DMAs, but with the technical indicators heading nowhere in neutral territory. "Shorter term, the 4 hours chart shows that the price is holding above its moving averages, but that the technical indicators have turned lower around their mid-lines, increasing the risk of a bearish movement for this Monday, to be confirmed on a downward acceleration below 123.00. Nevertheless, buyers are expected to keep surging on approaches to the base of the mentioned range at 122.20."

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