Jan 13, 2017, 11.00 AM | Source: Mecklai Financial
The Yen reversal?
The above graph is line chart of USDJPY 1st November 2016 till now.
USDJPY dropped yesterday to a one-month low today amid safe-haven demand for Yen after Donald Trump failed to clarify on US economic policy going ahead. Today, the pair further plunged more than 1% to 113.86 from levels of 118.66 seen on 15 December around the time of the first US rate hike.
Donald Trump was mostly focused on allegations of Russian involvement in his election result and his alleged closeness with Putin and wall build up between US and Mexico. The uncertainty generated by his comments saw the bullish momentum in DXY taking a breather at least until he finally takes office on Jan 20.
Japans economic releases show that current account surged to surplus of 1.80 trillion yen against expectation of 1.48 trillion yen surplus. Last week, the pair dropped below 116 after positive manufacturing PMI data numbers, which jumped to 52.5 from 51.9.
Going ahead, USDJPY is likely to move sideways with positive bias amid hope for rate hike in US. Technically speaking, the pair has broken the major support of 114.00 levels and it is likely to slide towards near term support of 113.10 (EMA55). If prices break this level, it could slide towards next support of 111.00 levels. On the higher side, the pair is looking immediate resistance 116.10 and 117.60.