Recently USD/JPY has been in the corrective structure at the edge of breaking the resistance area of 111.60-112.20. There has been a good amount of volatility in the intraday charts which lead to small indecision candles in the daily chart. After the Federal Funds Rate hike to 1.25% from 1.00% USD has been observed to gain significantly over the JPY after a long selling streak in this pair. On the JPY side due to not so impressive economic reports, the currency has been weaker in comparison to USD which did affect the JPY gains in a macro perspective. Today we have Japanese BOJ Summary of Opinions which is expected to be a quite high impact as it includes the BOJ’s projection of inflation and economic growth and it is the primary tool for BOJ to communicate their economic and monetary projections to investors. Along with it, JPY SPPI report is going to be published today which is expected to be unchanged at 0.7%. On the USD side, today we have Core Durable Goods Orders report which is expected to show a rise to 0.4% from previous value of -0.5% and Durable Goods Orders is expected to show a less deficit at -0.5% which previously was at -0.8%. In the morning today, we have high impact JPY economic reports and at the closing hours we have USD economic reports which are expected to bring in a good amount of volatility in the market but USD is expected to have an upper hand over JPY due to high-impact economic reports in the coming days.
Now let us look at the technical view, the price is currently residing at the edge of the resistance area of 111.60-112.20. As the pair is in a corrective structure with no specific trend in place, a daily close above the resistance level of 112.20 will signal further bullish move in this pair with a target towards 114.00-50 area and if the price rejects off the resistance area of 111.60-112.20 with a daily close and remains below the resistance area then we will be looking forward to selling in this pair with a target towards 108.50 support level.
The material has been provided by InstaForex Company – www.instaforex.com