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30 Sep 2013
USD/JPY set for weak performance? Loses 98 zone
FXstreet.com (Chicago) - USD/JPY opened Tokyo’s session weaker against the yen after heavy selling manifesting a bearish gap. The pair continues declining extending downward trendline with origins on September 12th as market participants rush to buy safe-haven currencies on potential US government shutdown due to debt ceiling crisis.
October madness ahead?
Due to the US potential government shutdown, high volatility is expected and rumors spread stating the yen may be the best trade this week as uncertainty will trigger market panic and rush buying of safe-haven currencies with a dumped dollar.
USD/JPY Technical Levels
Technically speaking, the pair is offered at 97.87 and oscillates between supports aligned at 97.44 (August 20th lows), 96.92 (August 21st lows) ahead of 95.92 (August 10th lows) and resistances set at 98.47 (September 25th lows), 99.12 (September 24th highs) followed by 99.69 (September 20th highs). According to the FXstreet.com trend index, the pair is slightly bearish on one-hour timeframe below the EMA20. The Nikkei 225 retraces 1.64% so far.
According to the Saxo Team technical analysis group, this week “offers key even risks for the two in the form of a Shinzo Abe speech on October 1 that will see the prime minister announcing plans for: (1) a possible corporate tax break (interesting, rumors of this tax cut this week saw a sharp weakening of the JPY that was quickly erased), (2) whether there will be a stimulus (and whether that stimulus will be financed with debt issuance – probably too early for overt money printing), and (3) whether the sales tax increase will go forward on schedule.”
October madness ahead?
Due to the US potential government shutdown, high volatility is expected and rumors spread stating the yen may be the best trade this week as uncertainty will trigger market panic and rush buying of safe-haven currencies with a dumped dollar.
USD/JPY Technical Levels
Technically speaking, the pair is offered at 97.87 and oscillates between supports aligned at 97.44 (August 20th lows), 96.92 (August 21st lows) ahead of 95.92 (August 10th lows) and resistances set at 98.47 (September 25th lows), 99.12 (September 24th highs) followed by 99.69 (September 20th highs). According to the FXstreet.com trend index, the pair is slightly bearish on one-hour timeframe below the EMA20. The Nikkei 225 retraces 1.64% so far.
According to the Saxo Team technical analysis group, this week “offers key even risks for the two in the form of a Shinzo Abe speech on October 1 that will see the prime minister announcing plans for: (1) a possible corporate tax break (interesting, rumors of this tax cut this week saw a sharp weakening of the JPY that was quickly erased), (2) whether there will be a stimulus (and whether that stimulus will be financed with debt issuance – probably too early for overt money printing), and (3) whether the sales tax increase will go forward on schedule.”