USD/JPY Logs Significant Losses

The USD/JPY continued its heavy losses yesterday after the currency pair reactive negatively to the inflection point of our 1^st tier uptrend and downtrend lines.  Volume increased to the downside with the currency pair breaking below important March 19 lows.  The USD/JPY seems to finally be making a decision trend-wise after months of heavy consolidation.  We viewed our 1^st tier uptrend line as a critical support, and it wouldn’t be surprising to see losses accelerate over the coming week.  The USD/JPY’s negative inflection comes with the S&P futures trading at important supports and 2^nd quarter earnings season on the way.  It will be interesting to see if the USD/JPY’s present breakdown indicates an upcoming selloff in U.S. equities.  If so, we could witness the USD/JPY retest the highly psychological 90 level.

Japan reported discouraging Core Machinery Orders and Current Account data Tuesday.  These data points signal the Japanese economy continues to feel pressure from declining demand for its manufactured goods both at home and abroad.  Lower Japanese corporate earnings and higher unemployment are pinching domestic demand.  The discouraging Current Account number makes investors worry that international consumption is not picking up as quickly as the improvement in global consumer sentiment data may suggest.  An appreciating Yen should only make matters worse, so a declaration of the downtrend by the USD/JPY could be very bad news for Japan.

Present Price: 92.84.

Resistances: 93.32, 93.76, 94.45, 94.99, 95.73

Supports:  92.57, 91.96, 91.50, 91.03, 90.28

Psychological: 90, 95

Subscribe by RSS Subscribe by Email