USD/JPY posts lowest close since 2014

By FXStreet The Japanese yen rose sharply against the US dollar for the second day in a row and is about to post the strongest close since October 2014. USD/JPY bottomed at 110.66, after breaking below previous 2016 lows located at 110.95 and then bounced to the upside.

The recovery of the pair from the lows boosted speculation that the Bank of Japan was behind the move, intervening in the market to weaken the yen. USD/JPY rose to 112.00 and then resumed the decline but it was able to hold above 111.00.

Currently, it trades at 111.40/50, 225 pips below the level it had before the FOMC decision.

Technical outlook

The 1-hour chart is showing that the 100 and 200 SMAs have accelerated their declines far above the current level while the technical indicators have bounced from overbought levels, but remain within negative territory, rather following the latest upward corrective move than suggesting the pair may advance further, explained Valeria Bednarik, Chief Analyst.

“In the 4 hours chart, the technical indicators also corrected oversold readings, but have lost upward strength well below their mid-lines, in line with the shorter term outlook. The risk remains towards the downside, with another slide …read more

Source:: FX Street