USD/JPY threatens to drop below 106.00
|- Yen remains solidly bid.
- Ignores Kuroda's dovish talk.
Kuroda's nomination for the post of Bank of Japan (BOJ) head is being greeted with Yen strength.
As of writing, the USD/JPY pair is dangerously close to breaching the psychological support level of 106.00.
The Yen bulls have little reason to fear as Japanese Finance Minister Aso talked down the need for FX intervention yesterday. Meanwhile, governor Kuroda tried to jawbone the Yen today by stating the BOJ is no situation to offer (QQE) exit plan. But, so far markets have not paid heed to his dovish talk.
Moreover, Yen is well bid seemingly due to fears that combination of fiscal stimulus, higher inflation, and the resulting faster Fed tightening could lead to a hard landing in the US.
USD/JPY Technical Levels
Under 106.00 (psychological level), the major support is seen at 105.72 (monthly 200-MA) and 105.55 (May 2016 low). On the other hand, a break above 106.22 (1-hour 10-MA) could yield corrective rally to 106.75 (1-hour 50-MA) and 106.86 (resistance on 1-hour chart).
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