The pair comes from its worst month in twenty-four years, having extended the decline to four-month lows in December. This has been largely fueled by expectations for a downshift by the Fed, with a 50 basis points rate hike next week, supported by softer inflation and Chair Powell's last speech.
A series of strong economic data by the US however, firmed up expectations around the central bank's tightening path, which sparked a USDOLLAR relief-rally at the start of the week. USD/JPY is constructive today and has the ability to push for fresh highs and towards the key 139.50-140.60 region.
However, this is a strong cluster of resistances which includes the 23.8% Fibonacci of the October high/December low slump, the descending trend line from those highs and the EMA200. The greenback does not yet inspire confidence for clearing all those hurdles and looking towards and beyond 142.78.
USD/JPY is upbeat, but has been largely consolidating its gains after Monday's strong showing and remains in a precarious position. A containment of the so far limited rebound, leaves the pair in risk of lower lows (133.61), although 130.38-09 looks distant for now.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.