USD/JPY: Capped at 100 Hr SMA on Strong Recovery
USD/JPY
has rallied as markets recover and some after the Doha event that
failed to find a concord between oil ministers in OPEC and non-OPEC
nations meeting over the weekend.
Yen was a heavy bid at the
start of the Asian week on the uncertainties and how markets will react
to the news after they return form the weekend to trading desks.
However, the downside in oil was short-lived and oil recovered from lows
of $37.61bbls WTI back to the $40.00bbls mark. Stocks have also
recovered on the short-lived Doha news
and the yen has subsequently headed for the back door again with
USD/JPY testing territory towards the 109 handle and now in the green at
108.88 spot and 0.08% up.
Meanwhile, Kuroda's headlines from
the Wall Street journal are that BoJ will not hesitate to act to lift
inflation after saying that recent Yen appreciation could undermine the
BoJ's goal to raise inflation to the desired 2% target. He is obviously
trying to off-set the green light that he gave to USD/JPY bears last
week when he said that "Excessive Yen gains have been corrected in the
past few days"?
USD/JPY levels
Through
the 100 hr sma at 108.93, R1 is located at 109.27 and above Friday's
109.04 high.109.50 and R2 could be a strong level of resistance with
stops and offers converging ahead of R3 at 109.81. Thereafter, we have
the April 6th high at 110.64. To the downside, 108.12 has been the US
session low while overnight, the price bottomed at 107.82 intraday. S3
is located at 107.59 and 107.50 is an area of potentially strong support
and bids.
"Below 107.63 lies major support – namely 106.63/38.2%
retracement of the move up from 2012. In this vicinity we also find the
200 month ma at 105.86 and we suspect that the market will attempt to
stabilise here," explained by Karen Jones, chief analyst at Commerzbank.
