USDJPY makes new eight-month highs ahead of central bankers chat. What levels are in play?

The USDJPY is pushing to get a new high for the year and a new eight-month high going back to November as the head of the global central bankers chat in Sintra at 9:30 AM ET.

Recent policy action saw the

  • ECB raise rates by 25 basis points and is expected to increase rates in July and September.
  • BOE surprised last week with a 50 basis point hike.
  • Fed kept rates unchanged at the last meeting, but is looking toward a hike in July and an additional hike between now and the end of the year. Yesterday in the US data was stronger than expected with durable goods orders higher than expected, new home sales and housing data also better, and consumer confidence moving higher.

The BOJ meanwhile still maintains yield curve controls and rates at low levels. That has the JPY continuing to weaken (USDJPY moving higher). The EURJPY is doing even better as it trades at 15-year highs.

The buyers remain in control in the USDJPY (and all JPY pairs). Technically, the rising 100-hour moving average (blue line in chart below) is 90 pips lower at 143.469. Last week, the price skimmed against those moving averages at corrective lows (see blue line) and found support buyers. Ultimately if the sellers are to take more control getting below that 100 hour moving average at 143.469 currently is needed. Ahead of that moving average is an upward-sloping trend line near 143.60.

On the upside, a top-side channel trend line cuts across at 144.766. The price move to the upside today extended above another trend line near 144.31. Move back below that level and traders will eye the high from Friday at 143.86 as an interim level ahead of the 100 hour MA below.

This article was written by Greg Michalowski at Source