USD/JPY is currently trading at 112.57 with a high of 112.78 and a low of 112.54.
Japan is away today and there is no tier one data, leaving the yen flat currently with a bias to the upside (USD/JPY negative).
"As often is the case, the dollar-yen rate is in a range," noted analysts at Brown Brothers Harriman:
"The JPY115 area marks the upper end of the two-month trading range. The lower end is near JPY111.60. The technical indicators are consistent with a test on the lower end of the range. If that fails to hold, the next target would be JPY110."
For the day ahead, we will hear further Fedspeak with Evans speaking in New York at a business economics luncheon followed by audience and media Q&A. Meanwhile, the dollar could remain under pressure within the current technical correction that has come about post the US jobs report that failed to impress the markets along with the subsequent dovish hike from the Fed.
USD/JPY is on the route towards the 111.77/59 levels consisting of the two-month support line and February lows. Valeria Bednarik, chief analyst at FXStree explained that the pair is poised to extend its decline from a technical point of view, given that in the daily chart, it settled below its 100 SMA, now losing upward strength a few pips below 140.50, a major Fibonacci resistance, whilst technical indicators head sharply lower within bearish territory:
"In the 4 hours chart, the pair accelerated its decline after meeting continued selling interest on attempts to surpass a horizontal 200 SMA at 113.50, whilst technical indicators have moderated their bearish momentum, but consolidate within oversold readings, indicating further slides are likely towards 112.00."
However, analysts at Commerzbank remain bullish and explained that only below 111.59 would negate their longer term upside bias and introduce scope to Fibonacci support at 109.92 and, if seen, the 200-day ma at 108.06. "Above 115.62, we look for a challenge to the key short-term resistance offered by the 16-month resistance line at 117.68 – and this remains our favoured view."
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