USD/JPY finds support at 120.65

By FXStreet FXStreet (Córdoba) – USD/JPY dropped further, weakened after the release of US economic data and bottomed at 120.65. From there bounced back to the upside, trimming losses. It was hovering around 121.00, near Friday’s closing price.

Before breaking to the downside, the pair was moving in a range between 121.50 and 121.05. It broke to the downside and weakened. Despite moving away from the lows price still holds below the 20-hour moving average that stands around 121.20. If it rises above it could gain momentum and climb to test daily highs. On the opposite direction, a consolidation significantly below 121.00 could open the doors for another corrective leg.

Market overpricing?

The pair rallied on Friday after the Bank of Japan lowered the interest rate to negative territory. USD/JPY rose 300 pips during that day and currently it remains near Friday’s highs and 240 pips above the level it had before the decision. The decision exacerbated monetary policy divergences. In the US, the Fed left interest rate unchanged in January, but in December started the normalization process by lifting the Fed Funds rate from 0 – 0.25% to 0.25% – 0.50%.

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Source:: FX Street