USDJPY Prediction: Japanese GDP is favorable of BoJ policies. A breakout of the rising triangle is imminent, putting the 200-day MA in danger.
USDJPY Hawks are encouraged by Japan’s GDP data.
After yesterday night’s US debt ceiling discussions produced some encouraging results. However not sufficient to quell market fears just yet. The Yen appears to be headed for its fifth straight loss versus the USD. Traders continue to prefer the dollar to the yen as a safe haven currency. After excellent Japanese GDP figures (refer to economic schedule under) failed to reverse the previous trend. Tthe choice became even more obvious.
Economic Activity Schedule
From the standpoint of Japan, the strong economic growth would naturally cause higher prices (beyond their 2% objective).And might lead to a certain sort of policy adjustment. Most probably by modifying the present Yield Curve Control (YCC) settings in the near term.
As anticipated next meetings may be the beginning of the aforesaid adjustments via which aggressive re-pricing may take place. The Bank of Japan’s (BOJ) money market prices indicates no genuine meaningful shift.
Technical Perspective
On the other hand, a more dovish position taken by the (BoJ) weighs down the Japanese Yen (JPY). It’s important to remember that BoJ Governor stated last week that it was premature to talk about precise departure strategies for the extensive stimulus package.
This weakens the JPY’s safe-haven character and maintains support for the USDPY pair’s current upward trend, coupled with a little increase in US equities futures. However, a slight decrease in the yield on US Treasury bonds may discourage bulls from making risky wagers. The US debit celing crisis helping the yen at the moment
Technical Levels
Resistance levels:
- 137.91 resistance
- 200-day MA
Support levels:
- 135.00
- 131.58
