USD/JPY: double bottom playing out to test converging hourly smas
|- USD/JPY: recovering from the double bottom, piercing 10 and 21-hr smas.
- USD/JPY: Japanese a big miss from expected, still rising.
USD/JPY has kicked off in Tokyo with the bulls showing their hand first, running up 10 pips to the hourly 200 and 50 smas after 30 pip ranged day overnight. Currently, USD/JPY is trading at 107.12, up 0.11% on the day, having posted a daily high at 107.16 and low at 106.99, (NY 106.90 and 107.20).
On the data miss, "Japanese exports rose 2.1 percent in March - its 16th straight monthly rise, although the actual reading was well below the estimated figure of 4.7 percent," USD/JPY is firmer in the consolidation and minor correction in Tokyo, where otherwise, USD/JPY has been on the defensive since 13 April decline at 107.77.
USD/JPY subdued, what's next?
There was a steep rise in equities overnight although the longer-term US treasury yields fell fractionally, (10yrs were lower to 2.81% while the 2yrs made their highest levels since 2008 to 2.40%). Fed chat was mixed but the dollar was softer on a slightly dovish rhetoric from Williams and Evens - (Fed fund futures yields continued to price the next rate hike in June around a 90% chance (Bloomberg calculations) - all in all, making for a subdued performance from the pair overnight.
Eyes will keep on Trump and Abe's meeting that continues on Wednesday, (trade/N.Korea subject matters), and also comments from the likes of Dudley and Quarles. The Beige Book of regional economic anecdotes will also be released.
USD/JPY levels
USDJPY: Continues to hover between the Daily cloud base/Daily Tenkan - Jim Langlands, FX Charts
Valeria Bednarik, chief analyst at FXStreet noted that the pair has posted a lower low and a lower high daily basis for a third consecutive day, although with nothing yet to confirm a bearish breakout.
"Shorter term, and according to the 4 hours chart, the pair continues developing above its 100 and 200 SMA, with the shortest advancing above the largest, and currently acting as dynamic support around 106.60, but with technical indicators holding within negative territory, with limited downward strength, also skewing the risk toward the downside," Valeria added.
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