USD/JPY: bullish/sideways on bearish US stocks/FOMC

By FXStreet FXStreet (Guatemala) – USD/JPY is making a case for the 123 handle and should fundamentals allow it, the dollar’s strength should be underpinned on the FOMC and Fed-lift off yesterday into the New Year while US stocks falter.

However, we are in holiday season now and moves could be large and non directional in any which way, or we could be in for a very calm period, but repatriation of dollar flows usually supports dollar strength.

As noted by analysts at Bank of Tokyo Mitsubishi, the Yen could come under pressure on the basis of the concerns about a lack of inflation in the Japanese economy and markets will be keeping an eye on Kuroda’s rhetoric for any changes towards a less bullish tone in that respect.

USD/JPY levels

Technically, on the long term charts, RSI (9) has been recovering to over 50 since the Nov downtrend above 75. The next resistance is offered by the recent highs at 123.77 guarding the August high of 125.00/28. “Intraday dips lower are indicated to hold circa 121.65. The support line at 120.33 guards key support, which remains the 119.11 2012-2015 uptrend, which we look to hold,” explained Karen Jones, chief …read more

Source:: FX Street