US$Jpy was able to reach 111.42 on Friday on the back of Thursday’s hawkish FOMC outcome before reversing sharply after the soft US housing data, to finish towards session lows of 110.64, where the 200 DMA prevented further losses.
The 4 hour/daily momentum indicators are mixed so we could see further choppy trade near 111.00 on Monday, but above which we could see a return to Friday’s high. Above 111.50 would open the way to then to 111.70 and to 111.90, which should be decent resistance, but beyond which could head towards 112.00/20.
The downside will find bids at Friday’s low, a break of which would then head towards 110.30 and possibly back to 110.00.
The dollar, having turned higher to make 3 consecutive higher lows, would seem to be building for further gains and as long as we do not make a daily close under 110.64, I prefer to trade it from the long side. If that fails to occur, then resume a neutral stance.
Economic data highlights will include:
M: Trade Balance
T: All Industry Activity Index,
W: BOJ Minutes
T:
F: Nikkei Flash Mfg PMI
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