USDJPY hits some resistance After rocketing higher on the back of Yellen’s comments at her first press conference as Fed Chair, USDJPY has been broadly trending sideways. The pair is struggling with some resistance around its 100-day and 50-day SMAs. With Japan on holiday today and a lack of potential market moving date due for release, USDJPY may not have the legs to break through this level during the Asia session. However, three FOMC members are scheduled to speak in the US session tonight, all of which are going to be watched by the market for any further clarification on Yellen’s comments earlier in the week. The Fed Chair made the mistake of being too specific. When asked how long the Fed may wait between halting its QE program and raising interest rates, Yellen said “it was hard to define but it probably means something on the order of around six months”. All the market heard was six months, which suggests that the Fed may start increasing interest sooner than the Fed had expected to raise rates (March or April next year). The Fed may attempt to back track now by clarifying that six months is far from a hard target, thus the market is going to pay attention to tonight’s speeches. If the Fed is successful in instilling some doubt about the six-month guideline, which is going to be a very hard task, USDJPY could pull-back towards 102.00. However, now that the cat’s out of the bag, it’s always very hard to get back in. Support 102.05 101.25 100.75 Resistance 102.70 103.15 103.75
Posted on: Fri, 21 Mar 2014 08:27:27 +0000
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