Back
20 May 2014
USD/JPY prints bullish hammer after 200-dma failure
FXStreet (Bali) - USD/JPY has been snapped back up towards the 101.50 vicinity after buyers re-emerged following a false break of the 200 dma, which has resulted in a bullish hammer on the daily chart.
200dma, BoJ, US bond sentiment all adds up
Despite the decline below the widely followed 200 dma, the pair was trading into the bottom of the range around 101.20, a reason to be cautious. Additionally, the fact that the BOJ meets tomorrow (expectations are non-existent so there is room for a surprise) coupled with signs of the short squeeze in the bonds market coming to an end, as 10-year yields turned around to 2.54% from 2.49%.
USD/JPY technicals
Technically, Valeria Bednarik, Chief Analyst at FXStreet, shares her view, noting that on the hourly, the chart shows price "mostly correcting oversold readings rather than signaling further recoveries." In the 4 hours chart, Valeria sees "indicators also aiming higher but close to oversold levels, supporting the corrective case." A clean break of the 200 DMA is now needed, according to the Analyst, "to trigger another leg lower down to 100.70 in the short term, but exposing the critical 100.00 level."
200dma, BoJ, US bond sentiment all adds up
Despite the decline below the widely followed 200 dma, the pair was trading into the bottom of the range around 101.20, a reason to be cautious. Additionally, the fact that the BOJ meets tomorrow (expectations are non-existent so there is room for a surprise) coupled with signs of the short squeeze in the bonds market coming to an end, as 10-year yields turned around to 2.54% from 2.49%.
USD/JPY technicals
Technically, Valeria Bednarik, Chief Analyst at FXStreet, shares her view, noting that on the hourly, the chart shows price "mostly correcting oversold readings rather than signaling further recoveries." In the 4 hours chart, Valeria sees "indicators also aiming higher but close to oversold levels, supporting the corrective case." A clean break of the 200 DMA is now needed, according to the Analyst, "to trigger another leg lower down to 100.70 in the short term, but exposing the critical 100.00 level."