USD/JPY: bears testing bull's commitments at 112 handle

Ross J Burland FXStreet

USD/JPY is offered in Toky, following the theme of last week's closing session with a strong yen while US interest rates were lower. Today, we are testing the bulls commitments at the 112 handle with a low of 111.93 so far.

Trade and geo-political worries continued to dominate the FX space and USD/JPY extended a multi-day decline to 111.94 and the the safe-haven yen was outperforming all the majors. In respect to the week ahead, investors may focus on President Trump’s speech to Congress to get a stronger sense of priorities with regard to regional trade issues. Other than that, we will look to Jan US durable goods orders as a catalyst that are expected to rebound 1.6% following a fall of 0.4% in Dec to $227bn. "Last month’s drop was driven by a large contraction in defence aircraft – a typically volatile sector. Excluding transportation, orders increased 0.5% and excluding defence, orders increased 1.7%," explained analysts at Westpac who also noted that Fedspeak involves Kaplan in a moderated discussion with media and audience Q&A.

Trump will be in focus this week - ANZ

USD/JPY levels

USD/JPY short-term technicals are bearish and USD/JPY retains a soft undertone on the short-term charts with the early Feb low at 111.60 on the technical radar. Resistance at 112.60 guards 112.80 and 113.80. Valeria Bednarik, chief analysts at FXStreet explained that in the 4 hours chart, the price is well its moving averages, whilst the Momentum indicator heads south at 1-week lows and the RSI consolidates around 30, in line with the longer-term technical outlook.

Weekend politics: the euro is under scrutiny

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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