USD/JPY: downside opening up to test 120.20 support

By FXStreet FXStreet (Guatemala) – USD/JPY is weighted to the downside in a bearish formation on the charts while Tokyo gets going and offers emerge in the open extending losses from overnight highs at 120.40 to score a low today so far at 120.23. The markets have been volatile, on light volume mind you, as we head towards year ending 2015.

For the New Year, we spring into action with the FOMC minutes while markets try to gauge just how gradual the incremental rate rises by the Fed are going to be throughout 2016. The recent data from the US will kick in next year in that respect with the recent release of core PCE inflation that registered a stronger than expected 1.4% y/y for example, which is essentially only a moderate pace of inflation. Moreover, as analysts at Rabobank noted, “The USD doing a lot of the heavy lifting in terms of monetary tightening we expect that the Fed will hike no more than twice in 2016 and that this relatively gradual pace of rate hikes should help keep USD strength in check.”

USD/JPY levels

Technically, Valeria Bednarik, chief analyst at FXStreet explained that the recovery stalled short from completing a …read more

Source:: FX Street