USD/JPY finally about to make the U-turn to 103s?


  • USD/JPY is under pressure as the US dollar is broadly sold off across the board. 
  • DXY has been telegraphing a downside correction for a number of days. 

USD/JPY is under pressure in the Tokyo open as the USD slides in what is a potential making of a significant correction to the downside in the DXY, as forecasted in the prior analysis, here: 

DXY's 5-wave forecast playing out

Fundamental updates

Meanwhile, there has been a couple of domestic releases for the yen with the Bank of Japan Summary of Opinions.

''It is appropriate for the bank to maintain the current monetary policy for the time being and, as before, take additional measures if necessary while closely monitoring the impact of COVID-19,'' the opinions stated.

We also had the Consumer Price Index for Tokyo in September arrive at 0.2% year on year vs the 0.1% expected, far behind the Bank of Japan's stubborn 2% national target. We will get the national data next month. 

As for news from the European and US sessions,  there were some encouraging reports across both sessions relating to Brexit signs of progress and European stimulus from the European Central Bank's President, Christine Lagarde who said the bank stands ready to act if needed. 

US data was a touch encouraging with the Dallas Fed manufacturing activity survey rising to 13.6 in Sep (vs 9.5 estimate, 8.0 prior).

''The index has recovered after spending March-July in contraction mode when the region was affected by the pandemic and low oil prices,'' analysts at Westpac explained. 

However, the heavy lifting was done on Wall Street's trading floors with US stocks jumping out of bed on the bid.

Portfolio reshuffling and bargain buying were potentially in play due to quarter-end flow following a dismal month. The dollar has been negatively correlated to US stocks which could be partly to blame for today's extension in the correction. 

USD/JPY technical analysis

While below 106, a U-turn is expected towards 103.30/50.

 

Overview
Today last price 105.45
Today Daily Change -0.06
Today Daily Change % -0.06
Today daily open 105.51
 
Trends
Daily SMA20 105.61
Daily SMA50 105.84
Daily SMA100 106.66
Daily SMA200 107.62
 
Levels
Previous Daily High 105.69
Previous Daily Low 105.26
Previous Weekly High 105.7
Previous Weekly Low 104
Previous Monthly High 107.05
Previous Monthly Low 105.1
Daily Fibonacci 38.2% 105.43
Daily Fibonacci 61.8% 105.53
Daily Pivot Point S1 105.29
Daily Pivot Point S2 105.06
Daily Pivot Point S3 104.86
Daily Pivot Point R1 105.71
Daily Pivot Point R2 105.92
Daily Pivot Point R3 106.14

 

 

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