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USD/JPY Breaks Through Resistance on Greek Deal
USD/JPY surged to an 11-day at 123.49 in the wake of the Greek deal news, and poised to test the July highs at 1.2371. The deal has also allowed FX markets to look past the Greek crisis and to a likely Fed rate hike by year-end. The Bank of Japan meets on policy this week, where a non-event as an outcome is widely anticipated by analysts
On Friday Fed Chair Janet Yellen said that the Fed’s biggest challenge is to make sure the financial system is strong enough and resilient enough to whether another crisis like that of the last decade. It’s the Fed’s task to be much more vigilant and much better prepared than was the case previously.
Yellen also took a swipe at the IMF saying that advice from the fund on U.S. rates is part of the spectrum opinion on appropriate policy and the overemphasis on timing of the lift-off is less important than the full path of policy over time.
USD/JPY’s gain breached resistance is at 122.94, which marks the 20-day moving average, and coincides with a downward sloping trend line that connects the highs in June with the highs in July. The Jul-2 peak at 123.71 provides the next resistance level. Support is now seen at the 20-day moving average. Despite the breakout to the upside momentum remain negative as the MACD (moving average convergence divergence) index is printing in the red with a downward sloping trajectory.
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