28 Jul 2015
USD/JPY: Bears regain control, 123 on sight
FXStreet (Mumbai) - The US dollar reversed mild gains and fell into the negative territory against its Japanese counterpart in the Asian morning, knocking-off USD/JPY to session lows near 123 handle. The major lost ground once again and sipped in the red as the yen remains well bid on risk-aversion amid China turmoil.
USD/JPY slips below 20-DMA
Currently, the USD/JPY pair trades -0.10% lower at 123.13, on its way to retest 123 handle. USD/JPY failed to resist 20-DMA and turned in to losses as yen bulls resumed its upside bias on risk-off sentiments after the Shanghai index plummeted over 8% on Monday amid renewed China slowdown fears.
Meanwhile, American data was largely ignored by the markets on Monday with the buck lying near two-week lows versus the yen, even though the US durable goods orders jumped beyond expectations in June from a revised -2.1% to 3.4%, while the core gauge ticked higher to 0.8% from a revised -0.1%.
Looking ahead, markets now await Chinese stock markets to open which may provide fresh incentives to the safe-haven in yen while US macro data due later today may also influence the pair amid data-quiet European session ahead.
Traders now turn their focus towards Federal Open Market Committee (FOMC) statement, scheduled to be released on Wednesday. Market expects to see a firmer tone come out of the Federal Reserve (Fed), confirming the possibility of a rate hike in September.
Analysts at TD Securities noted, “The Fed may use the July FOMC statement to set up the September hike, by nudging the market further with tweaks to the language. Most likely this comes from the upgrades to economic conditions in the first paragraph."
USD/JPY Technical Levels
To the upside, the next resistance is located 123. 85 (July 26 High) levels and above which it could extend gains 124.12 (July 24 High) levels. To the downside immediate support might be located at 123.01 (July 27 Low) below that at 122.57 (July 3 Low) levels.
USD/JPY slips below 20-DMA
Currently, the USD/JPY pair trades -0.10% lower at 123.13, on its way to retest 123 handle. USD/JPY failed to resist 20-DMA and turned in to losses as yen bulls resumed its upside bias on risk-off sentiments after the Shanghai index plummeted over 8% on Monday amid renewed China slowdown fears.
Meanwhile, American data was largely ignored by the markets on Monday with the buck lying near two-week lows versus the yen, even though the US durable goods orders jumped beyond expectations in June from a revised -2.1% to 3.4%, while the core gauge ticked higher to 0.8% from a revised -0.1%.
Looking ahead, markets now await Chinese stock markets to open which may provide fresh incentives to the safe-haven in yen while US macro data due later today may also influence the pair amid data-quiet European session ahead.
Traders now turn their focus towards Federal Open Market Committee (FOMC) statement, scheduled to be released on Wednesday. Market expects to see a firmer tone come out of the Federal Reserve (Fed), confirming the possibility of a rate hike in September.
Analysts at TD Securities noted, “The Fed may use the July FOMC statement to set up the September hike, by nudging the market further with tweaks to the language. Most likely this comes from the upgrades to economic conditions in the first paragraph."
USD/JPY Technical Levels
To the upside, the next resistance is located 123. 85 (July 26 High) levels and above which it could extend gains 124.12 (July 24 High) levels. To the downside immediate support might be located at 123.01 (July 27 Low) below that at 122.57 (July 3 Low) levels.