USD/JPY: well, that was a short lived time on the 114 handle, wasn't it?
|- Eyes on Trump's Fed selection
- Will tax reform come in the next number of sessions?
- Abe's victory was a short-lived time on the 114 handle, but technically still bullish?
USD/JPY has drifted lower through the London and NY session after a rally to the highest level since July was faded on a sell the fact scenario surrounding abe's expected victory. Currently, USD/JPY is trading at 113.38, down -0.06% on the day, having posted a daily high at 113.50 and low at 113.30.
The European's consolidated the rise and NY bears took over control right down to 113.24 the low where the pair closed as Wall Street slipped along with US yields at the finish line. It seems investors are now taking a breather after a record number of sessions making higher highs and the optimism around the US economy wasn't enough for Wall Street to maintain the bid after all three benchmarks closed higher on Friday.
US tax form to underpin the dollar?
However, the dollar remains underpinned by Trump making an announcement in NY that he is very close to making a decision on who the next Fed chair will be while the idea that tax reform could be achieved as soon as next week is an additional bullish factor for both Wall Street and the US dollar.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that the pair posted a daily high of 114.09 before establishing a handful of pips below the 114.00 mark, retaining anyway its positive stance according to technical readings in the 4 hours chart:
"The price is far above marginally bullish 100 and 200 SMAs, whilst technical indicators hold near their daily highs, aiming to resume their advances. The opening gap was pretty much filled, but Friday's close at 113.43 is now a critical support, as to maintain the bullish stance, the pair should bounce quickly in the case of a retracement towards the level. To the upside, a break above 114.09 should lead to an advance towards the 114.40 region, a major static resistance, as the pair topped around it in May and July," Valeria added.
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