USD/JPY analysis: poised to challenge 112.00 again
|USD/JPY Current price: 112.61
- BOJ's announcement fueled speculation of exit strategy.
- Soaring US yields halted the slide just briefly.
The Japanese yen was an exception to the rule, the only major that appreciated strongly against the greenback this Tuesday. The USD/JPY pair fell to a 112.42, its lowest in almost a week, following BOJ's decision to trim the amount of JGBs buying. The BOJ announced it will buy less of the long-dated bonds, buying ¥20B fewer bonds than the previous month, prompting speculation that the central bank may be considering an exit strategy to its QE program focused in the control of the yield curve. The pair's decline stalled in the US afternoon as Treasury yields soared, with the benchmark for the 10-year note jumping to 2.53% from previous 2.48%, its highest since last March. The USD/JPY pair's bounce in the US afternoon has been quite shallow, indicating that selling interest remains strong around the pair. In the 4 hours chart, the price is developing now below its 100 and 200 SMAs, both lacking directional strength, while technical indicators pared their declines near oversold readings and turned higher, although with very limited strength upward. Below the mentioned daily low, the pair will likely retest the 112.00 price zone, from where it bounced multiple times since early December.
Support levels: 112.90 112.60 112.10
Resistance levels: 113.40 113.75 114.10
View Live Chart for the USD/JPY
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