USD/JPY: Bears Taking This to 107.50 on Upside Failures?
is reversing the Tokyo open offer from 109.39 to 109.21 lows in a
mostly lower open in subdued markets that commenced overnight on Wall
Risk appetite is again squashed on the back of concerns that the Fed might indeed hike in June with odds of such an event increasing, as noted here by analysts at ANZ
The Japanese yen was the top performer overnight on risk aversion along with Japan and the US being at heads in respect to the G7 meetings that took place over the weekend and the Nikkei not liking the outcome of a complacent G7 who are clearly Non-harmonious on this matter.
USD/JPY bulls were rejected at 110.58 last week and the downside took out the 109.70 level and previous support on 19th May. Failures of that level on a correction of this downtrend would then open 107.50 5th May highs of 107.50 as a feasible target on a break of the 8th May highs at 108.36, in line of the 8hr 55 sma and below the 20 dma at 108.53.
"The market has recently based, we believe, at the 200 month and 200 week moving averages at 105.86/38. This area is key support and we continue to look for it to underpin the market. The new low of 105.55 was accompanied by a large divergence of the daily and weekly RSI and this reflects a loss of downside momentum," explained analysts at Commerzbank.