Technical Analysis of USD/JPY
The Japanese yen is the strongest performer against the US as the bout of risk aversion that sweeps across global equity markets props up both the yen and the greenback. With BoJ holding interest rate unchanged and given the broader shift to risk aversion, the USD/JPY fell sharply on Wednesday below the 80.00 area. With the MACD signal line holding below zero and the RSI unable to cross above 50 since mid-April on the daily chart, the technicals indicate that there is more room for downside movement. The selling bias is further supported by the bearish alignment of the 20 EMA below the 50 EMA that has been in place in the past three weeks. As the markets try to digest news from Europe, the pair could go all the way back to February’s intervention levels around 78. It is worth noting though that the pair is still being watched by the BoJ and that a potential expansion of monetary policy could send the USD/JPY back above 82.
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