USD/JPY Daily Technical Analysis for February 10, 2017

usd jpy

USDJPY at 10-day high

USDJPY Technical Overview

Yesterday Close          113.25

Today Open                113.25

Day’s Range   113.23 – 113.80

52 wk Range   99.08 – 118.67

1-Year Return 0.3%


USD/JPY Technical Support and Resistance

Possible trading range for today 113.23 – 113.80

Support 1: 112.14 Resistance 1: 113.42
Support 2: 111.74 Resistance 2: 113.82
Support 3: 111.10 Resistance 3: 114.46


USD/JPY Fundamental Forecast

Reflation trade is alive and kicking as the American dollar and the treasury yields spiked after Trump promised a major tax announcement in a few weeks. The Dollar-Yen pair jumped above 113.00 levels in the overnight trade and extended gains in the Asian session to 113.54 levels. The level was last seen on Feb. 1.

Consolidation ahead or Buy the Rumor, Sell the fact?

Trump’s promise to deliver on tax front in a few weeks means the ‘haven assets’ could either take a beating or consolidate. Buy the rumor, Sell the fact trade cannot be ruled out, although the pair may not have the same magnitude of the upside risk at the moment, given the tax cuts and fiscal spending have been largely priced-in during Nov-Dec period.

Meanwhile, consolidation is likely if the Treasury yields fail to extend Thursday’s rally. At the time of writing, the 10-yr yield and 2-yr yield were flat lined around 2.40% and 1.189%.

China trade numbers and US import price index are once again likely to play second fiddle to Trump tweets/comments. The heightened odds of tax cuts in the US could overshadow any dollar negative data releases/events.