USD/JPY remains subdued in a risk-off environment while the US data is not all that it was stacked up to be on the day last week with respect to the mixed nonfarm payrolls.
The weekend news was relatively light but concerning all the same, while the nonfarm payrolls background data was a cause for alarm, but despite that, the dollar remained well anchored after the initial drop in the DXYindex that partly recovered thereafter to close up 0.1% on the day. USD/JPY fell from 113.20 to 112.32.
“The yen was the strongest of the major currencies last week, gaining 2.2% against the greenback,” noted analysts at Brown Brothers Harriman, adding, “The yen’s gains ended a two-week drift lower, during which it lost about 0.5%. The US dollar successfully tested the JPY112 level twice, and the bounces (~JPY114.00 and ~JPY113.50) appeared to lack conviction. The Slow Stochastics has been trending higher since January 19, but last week levelled out and rolled over. The MACDs have not yet turned, though a turn still seems near.”
USD/JPY has eased back to the 38.2% retracement at 111.98 area and the 112.02 April high. “This is stronger support and we note that the recent move lower continues to indicate that this is the end of the corrective move, we also note the divergence of the daily RSI,” explained analysts at Commerzbank, “As a consequence is side lined very near term and we suspect will again attempt to recover. Initial resistance lies at 115.33 (imoku 2) and this will need to be regained in order to alleviate downside pressure and reintroduce scope to key short-term resistance offered by the 16-month resistance line at 118.21.”
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