11 Aug 2015
USD/JPY: Bulls regain control, rises to 124.80
FXStreet (Mumbai) - The US dollar is seen gathering pace versus its Japanese counterpart, driving USD/JPY back near highs, as fresh bid wave caught the US currency heading into the European opening bells while markets assess the latest yuan fix news and its implications on Asian currencies.
USD/JPY rises from 124.66 levels
Currently, the USD/JPY pair trades 0.13% higher at 124.80, attempting another run towards 125 barrier. USD/JPY remains well bid as the USD bulls regained control amid a generalized risk-off environment triggered by PBOC’s yuan depreciation by nearly 2% early today in a bid to spur the country’s exports and overall economic growth.
Moreover, the latest Yuan depreciation by the PBOC is widely expected to pressure USD/Asia currencies up, which also keeps the USD/JPY underpinned.
According to analysts at ANZ, "After holding onshore spot at 6.21 for so long, it is hard to see them just letting it go. What is clear is that a stable CNY had served as an anchor of some sorts for the rest of USD/Asia these past few months. This is no longer the case. A higher USD/CNY will pressure USD/Asia up."
Looking ahead, markets now shift focus to a set of US macro data lined up release later today ahead of BOJ monetary policy minutes and Japan’s industrial production data due tomorrow.
USD/JPY Technical Levels
To the upside, the next resistance is located 125.03 (Aug 5 High) levels and above which it could extend gains 125.69 (June 8 High) levels. To the downside immediate support might be located at 124.32 (June 5 Low) below that at 124 levels.
USD/JPY rises from 124.66 levels
Currently, the USD/JPY pair trades 0.13% higher at 124.80, attempting another run towards 125 barrier. USD/JPY remains well bid as the USD bulls regained control amid a generalized risk-off environment triggered by PBOC’s yuan depreciation by nearly 2% early today in a bid to spur the country’s exports and overall economic growth.
Moreover, the latest Yuan depreciation by the PBOC is widely expected to pressure USD/Asia currencies up, which also keeps the USD/JPY underpinned.
According to analysts at ANZ, "After holding onshore spot at 6.21 for so long, it is hard to see them just letting it go. What is clear is that a stable CNY had served as an anchor of some sorts for the rest of USD/Asia these past few months. This is no longer the case. A higher USD/CNY will pressure USD/Asia up."
Looking ahead, markets now shift focus to a set of US macro data lined up release later today ahead of BOJ monetary policy minutes and Japan’s industrial production data due tomorrow.
USD/JPY Technical Levels
To the upside, the next resistance is located 125.03 (Aug 5 High) levels and above which it could extend gains 125.69 (June 8 High) levels. To the downside immediate support might be located at 124.32 (June 5 Low) below that at 124 levels.