15 Jul 2015
USD/JPY kept below 123.50 ahead of BoJ
FXStreet (Bali) - After briefly coming into contact with 123.70 key resistance (weekly R1), USD/JPY was sold off during the last American session (early stages), only to recover most of its losses towards 123.30/40, although still failing to reclaim a key point of control at 123.50, now being well protected by new committed bears.
US retail sales worsen, Fed Yellen/BoJ eyed
The poor US retail sales report, missing expectations by a mile (-0.1% actual vs 0.7%) has dented the early Fed rate hike excitement, leading to an across the board USD sell-off last Tuesday, despite the Yen failed to capitalize on it. Attention will now shift to both, the Bank of Japan policy meeting later in Asia, and Fed Chair Yellen semi-annual testimony to Congress on monetary policy (Wed and Thursday).
With regards to the BoJ policy decision, the event is expected to be a non-mover for the Jaanese Yen. Valeria Bednarik, Chief Editor at FXStreet, wrote: "The Bank of Japan will have its monthly economic policy meeting during the upcoming Asian session, albeit there are little hopes of a change in the ongoing stimulus."
As per Yellen's testimony, according to Nomura: "We expect Yellen to largely repeat the economic and policy points that she offered last Friday. Of course we will be sensitive to any subtle changes in her comments on the economy and the outlook for policy. We expect that she will acknowledge that today’s retail sales data are noteworthy. That said, her basic message from Friday, i.e., that she expects liftoff this year but ultimately the timing will reflect how the data comes in still seems quite reasonable. Consequently, we do not expect major changes in her basic message."
USD/JPY technicals
Valeria Bednarik, Chief Editor at FXStreet, notes: "Technically, the 1 hour chart shows that the 100 SMA extended below the 200 SMA, both well below the current price and showing no directional strength, whilst the technical indicators head lower in negative territory, maintaining the risk towards the downside."
"In the 4 hours chart, the technical indicators have turned sharply lower from overbought territory, and maintain their bearish strength, but remain above their mid-lines, limiting the bearish potential at the time being", Valeria adds.
US retail sales worsen, Fed Yellen/BoJ eyed
The poor US retail sales report, missing expectations by a mile (-0.1% actual vs 0.7%) has dented the early Fed rate hike excitement, leading to an across the board USD sell-off last Tuesday, despite the Yen failed to capitalize on it. Attention will now shift to both, the Bank of Japan policy meeting later in Asia, and Fed Chair Yellen semi-annual testimony to Congress on monetary policy (Wed and Thursday).
With regards to the BoJ policy decision, the event is expected to be a non-mover for the Jaanese Yen. Valeria Bednarik, Chief Editor at FXStreet, wrote: "The Bank of Japan will have its monthly economic policy meeting during the upcoming Asian session, albeit there are little hopes of a change in the ongoing stimulus."
As per Yellen's testimony, according to Nomura: "We expect Yellen to largely repeat the economic and policy points that she offered last Friday. Of course we will be sensitive to any subtle changes in her comments on the economy and the outlook for policy. We expect that she will acknowledge that today’s retail sales data are noteworthy. That said, her basic message from Friday, i.e., that she expects liftoff this year but ultimately the timing will reflect how the data comes in still seems quite reasonable. Consequently, we do not expect major changes in her basic message."
USD/JPY technicals
Valeria Bednarik, Chief Editor at FXStreet, notes: "Technically, the 1 hour chart shows that the 100 SMA extended below the 200 SMA, both well below the current price and showing no directional strength, whilst the technical indicators head lower in negative territory, maintaining the risk towards the downside."
"In the 4 hours chart, the technical indicators have turned sharply lower from overbought territory, and maintain their bearish strength, but remain above their mid-lines, limiting the bearish potential at the time being", Valeria adds.