USD/JPY: loads of noise but no real action
|USD/JPY Current price: 111.83
- BOJ left monetary policy unchanged, put a time frame to its forward guidance.
- The US will release today Durable Goods Orders, seen bouncing in March.
The USD/JPY pair is trading a few pips below the 112.00 level again, despite bulls' enthusiasm by the end of the American session. The pair traded as high as 112.39, its highest since last December amid broad dollar's demand Wednesday, triggered by a series of political and macroeconomic news that highlighted the imbalances between the US economic health and that of its major rivals. Dollar's momentum faded early Asia as Australian, and New Zealand markets were closed celebrating the ANZAC Day, but retained its strength against most rivals, except the JPY affected by BOJ's decision.
The Bank of Japan left its monetary policy unchanged as expected, but, for the first time, it put a time frame on its forward guidance. Governor Kuroda said that global economic uncertainties had drawn policymaker's attention, and therefore, "wanted to clarify that we will keep rates low for a very long time." Rates will be maintained at current levels at least until the spring of 2020, but the timeframe could be much longer than that if the economy weakens. Not that Kuroda & Co. ultra-dovish stance surprised investors, neither a solid reason to buy the Yen. Seems that the lack of options of the central bank, fueled demand for safety. The sour tone of equities and depressed government bonds´ yields add to Yen's strength.
The US will release this Thursday its usual weekly unemployment figures, ad March Durable Goods Orders, seen bouncing after February's slump. The headline figure is expected at 0.8% vs. the previous -1.6%, while the Ex-transportation number is forecast at 0.2% vs. a previous -0.1%. Better-than-expected figures should boost the greenback, even against its Japanese rival.
The pair is back trading below its 20 SMA in the 4 hours chart and above the larger ones, which anyway lose upward strength. In the mentioned chart, technical indicators eased, the Momentum still stuck in neutral territory and the RSI gaining downward traction at around 46, skewing the risk to the downside. The pair is also nearing its recent lows in the 111.60 region, with a break below the level opening doors for another move south toward the 111.00 price zone.
Support levels: 111.60 111.25 110.90
Resistance levels: 112.15 112.50 112.85
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