USD/JPY Monday’s open at 105.61 and Friday’s end at 105.38 evidence the lack of overall direction. The reigning down-channel continues to order trading whereas risk-off is the predominant sentiment, Joseph Trevisani, an analyst at FXStreet, reports.
“The upper border of the inner channel descends from 105.80 to about 105.50 next week so even a sideways motion in the USD/JPY will, by Thursday or Friday bring it into contact. As we saw this week the likely response in the USD/JPY at that point is lower.”
“There is minor support at 104.60 but its position in the middle of the channel means that a move through has little overall import. Above the market the first resistance is at 106.00 followed by 106.50. A rise to these levels would not negate the incline as the wider channel which has its origin in the March panic would remain in place.”
“The downtrend in the USD/JPY is not a strong move based on economic or rate differentials but is the prevailing notion largely due to the lack of any alternative. A rousing recovery in the US economy would make short work of the weaker dollar but that has yet to arrive.”