USD/JPY Falls Below 111.00 as Nikkei Selling Picks Up

USD/JPY Falls Below 111.00 as Nikkei Selling Picks Up

26 April 2016, 05:38
Roberto Jacobs
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USD/JPY Falls Below 111.00 as Nikkei Selling Picks Up

USD/JPY has been knocked down ahead of the Tokyo lunch, last trading just below 111.00, where its re-testing the double bottom printed yesterday at 110.85.

JPY crosses follow Nikkei lower, FOMC/BOJ key focus

The aggressive selling flows seen in the Nikkei 225, now trading a day lows (-1.25%), has taken its toll on the Japanese Yen crosses, following the benchmark index lower in tandem and respecting the tight correlation between both asset classes.

The pair's main moves this week will most likely originate from the FOMC/BOJ outcomes, due on Wednesday US hours and Thursday Asian morning respectively. The Yen has recently seen a major long liquidation following headlines last Friday that the BOJ is considering negative rates on loans; if confirmed, and should the FOMC sound not as dovish as in recent meetings, USD/JPY is certainly at risk of getting a further boost.

Key levels for today

In terms of key levels to watch for today, a breakout of 110.85 should expose 110.73 (daily S1) ahead of mid-round number 110.50 and 110.27 (daily S2) before facing 110.00 psychological area. On the upside, the daily pivot at 111.30 has proven a tough resistance this week, thus a clear breakout is now needed to expose 111.50 ahead of the trend highs at 111.90/112.00.


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