- Reactive USD/JPY selling took place last night as the U.S Federal Reserve released its FOMC Statement and financial institutions sold the USD/JPY with solid price velocity.
- The currency pair went from the 147.875 area to a depth of nearly 1.46070.
- While in the midst of the U.S Federal Reserve’s FOMC Statement and the ensuing Fed Press Conference being digested by financial institutions, the USD/JPY displayed choppiness.
- As of this writing the USD/JPY is near the 146.860 ratio with rapid fluctuations being demonstrated.
Speculators who have been leaning towards bearish perspectives in the USD/JPY may have been rewarded in the past day as the currency pair has shown the ability to move downwards. The USD/JPY was trading near the 148.340 ratio on early Monday of this week. Last week’s highs touched the 148.700 level on Tuesday the 23rd of January. However wagering on downside price momentum in the USD/JPY has not been an easy task because of the rather solid reversals which are easy to see technically.
Fed’s Cautious Approach created Fluctuations in the USD/JPY
Last night’s Federal Reserve pronouncements provided no real surprises; the Fed has kept its policy intact and says they continue to monitor inflation while the U.S economy shows resilience. The Federal Funds Rate has been given no definite time regarding when the Fed will start to cut interest rates, except to say it appears that late spring remains the anticipated timetable. Thus the USD/JPY reacted with some initial selling as the Fed said it will cut rates.
The Fed Chairman said the U.S central bank would be inclined to cut the Federal Funds rate in a quicker manner if jobs numbers started to get weak. However, it was pointed out that U.S employment data remains solid even as some major U.S corporations are laying-off workers. The 147.000 mark now appears to be a very interesting resistance price level in the short-term for USD/JPY traders.
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Here Comes U.S Jobs Data Today
- The U.S will release its Non-Farm Employment Change numbers today and the results will cause another reaction in the USD/JPY.
- Caution continues to be advised for USD/JPY short-term speculators as they wager on direction in the currency pair.
While many traders may feel the USD/JPY remains in somewhat overbought territory patience is needed and speculators should not be overly ambitious. Yesterday’s trading highlighted the speed of reversals in the currency pair and these types of fast fluctuations may continue to be produced today.
USD/JPY Short Term Outlook:
Current Resistance: 147.110
Current Support: 146.840
High Target: 147.730
Low Target: 146.235
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