USD/JPY: Bears Testing 4hr100 SMA After Yellen's Q&A's
USD/JPY sold off on a broadly weak dollar on the back of a dovish outcome in Yellen's speech today and Q&A's that are taking place at the Economic Club of New York.
Yellen explained, in a nutshell that there are uncertainties that have prevented and will continue to prevent the Fed being able to confirm that there will be continued rate hikes in respect of meeting their preferred inflation target this or next year. The market took her comments as dovish.
Yellen has said in the Q&A's that, "Close to maximum employment goal. Inflation while low, good reason to believe its moving up. FOMC sees a slightly weaker projected pace of global growth." So clearly an uncertain outlook, good for USD/JPY bears.
USD/JPY's correction higher has been compromised and was unable to reach the 6-week channel at 114.02. the high has been 113.81. If there was a continuation of the reversal, then daily closes above 114.88 (38.2% retracement) would be confirming an attempted recovery and reversal, at least, of the Feb downtrend, targeting the 116.15 August 2015 low initially. On the downside, 100 sma on the 4hr sticks is located at 112.79 guarding the 50 sma on the same time frame at 112.47, just below S3 at 112.58. 112.16 is the double top 21st March and 29th Feb lows, so could be a strong level of support.
(Market News Provided by FXstreet)