USD/JPY extends rebound above 114.50 on a quiet session
|- DXY turns positive and rises for the second day in a row.
- Holiday in the US to favor consolidation in USD/JPY.
- Bank of Japan to announce decision on Tuesday.
The USD/JPY is rising on Monday, trading above 114.50, supported by a stronger US Dollar gains G10 currencies. The pair is having the best day since early January as it continues to recover from the monthly low it reached on Friday at 113.45.
On a quiet session, that includes a holiday in the US (Martin Luther King Jr.) the dollar shows some strength on a day without new information. Equity markets in Europe are modestly higher and so there are US stock futures.
On Tuesday, the Bank of Japan will announce its decision on monetary policy. No change is expected. “While no change is policy is expected, leaks suggest there will be some modest upgrades to the bank’s inflation outlook in its new Outlook Report forecasts. Other reports suggest the BOJ is debating how to prepare markets for eventual liftoff, but we find it extremely hard to believe that the bank is really serious about tightening. Officials are playing with fire here as this will add to strong yen impulses”, explained analysts at Brown Brothers Harriman.
Levels to watch
The sharp rebound weakened the bearish bias, and now technical indicators favor a consolidation of an extension of the recovery. A decline back under 114.00 could increase the bearish pressure again, exposing first 113.75 and then 113.50. The USD/JPY peaked at 114.58 on Monday. The immediate resistance is seen at 114.70, and then the 115.00 zone.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.