3 May 2016
USD/JPY slides further, drops below 106.00 handle
The USD/JPY pair's rebound on Monday was short-lived and the pair resumed its downward trajectory on Tuesday, dropping to as low as 105.75 its lowest level since mid-Oct. 2014.
USD bulls continue to feel the pain from last week's disappointment by the Bank of Japan, which surprisingly left its monetary policy unchanged. Investors were expecting the central bank to announce additional stimulus to combat low inflation and kick-start growth in the world's third-largest economy.
The pair has now broken below 106.00 handle, opening room for further downside in the near-term.
Technical levels to watch
The pair's downward momentum seems strong enough to continue dragging the pair towards its next major support near 105.20 level, marking monthly lows tested in Oct. 2014. Given the intensity of the fall in last few sessions, traders would be inclined to book profits at lower levels, thus increasing the prospect of a bounce-back from lower levels.
On the upside, attempts of recovery might now face immediate resistance near 106.00-106.10 level. This is followed by resistance at Monday high near 106.80 level. Only a decisive strength above Monday's high would increase prospect of pair's recovery in the near-term.
USD bulls continue to feel the pain from last week's disappointment by the Bank of Japan, which surprisingly left its monetary policy unchanged. Investors were expecting the central bank to announce additional stimulus to combat low inflation and kick-start growth in the world's third-largest economy.
The pair has now broken below 106.00 handle, opening room for further downside in the near-term.
Technical levels to watch
The pair's downward momentum seems strong enough to continue dragging the pair towards its next major support near 105.20 level, marking monthly lows tested in Oct. 2014. Given the intensity of the fall in last few sessions, traders would be inclined to book profits at lower levels, thus increasing the prospect of a bounce-back from lower levels.
On the upside, attempts of recovery might now face immediate resistance near 106.00-106.10 level. This is followed by resistance at Monday high near 106.80 level. Only a decisive strength above Monday's high would increase prospect of pair's recovery in the near-term.