USDJPY: Selling rallies is mildly preferred
|Positive risk sentiment allowed the dollar to reach 111.77 on Wednesday ahead of a sharp reversal in late US trade following the US tax announcement, with US$Jpy currently sitting pretty much at the day’s lows unchanged from the previous close, and will now await the BOJ announcement although no change is expected.
While the dailies look constructive, the short term momentum indicators have turned to point lower and a sterner test of 111.00 seems possible, below which could see a run towards 110.50 and to 110.35 and even to 110.00 although this seems doubtful at this stage. On the topside, minor resistance will be seen at 111.25 and 111.50 ahead of the session high of 111.77, and 112.00 although again this seems unlikely to be seen today.
Given the look of the short term momentum indicators, selling rallies is mildly preferred, but without looking for too much. Use 111.50/110.50 as a guide, with one eye on the BOJ.
Economic data highlights will include:
Foreign Bond/Stocks Investment, BOJ Interest Rate Decision/Outlook/Statement/Press Conference
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