USD/JPY - Upside capped by 1-hour 100-MA
|The Dollar-Yen pair briefly dipped to a low of 112.42 after struggling for the last few hours to take out a 1-hour 100-MA. The key moving average currently stands at 112.77, while the spot is trading at 112.65 levels.
The drop goes unexplained
The drop in the USD/JPY from the 1-hour 100-MA to 112.42 goes unexplained, given the treasury yields trade largely flat. Furthermore, the drop contradicts the contraction in the Japanese industrial output reported earlier today. Month-end inflows could have temporarily strengthened the bid tone around the Yen.
The focus remains on Trump’s speech to congress. Impatient markets want Trump to at least lay out the skeleton of the tax cuts/infrastructure program.
USD/JPY Technical Levels
A lift above 112.62 (Feb 17 low) would open doors for 113.00 (zero figure), above which a major hurdle is seen at 113.78 (Feb 21 high). On the other hand, a breakdown of support at 112.39 (1-hour 50-MA) would expose support at 111.99 (38.2% fib of Trump rally) and 111.60 (Feb 7 low).
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