USDJPY is extending its move lower after it hit an 11-month peak of 114.54 on October 4. Earlier on Monday, it touched a four-week low of 111.74. The Tenkan- and Kijun-sen lines are negatively aligned in support of a negative bias in the short-term. The Chikou Span though may be signaling a market that is close to oversold.
Upbeat US retail sales may allow the pair to rebound. Immediate resistance to gains could come around the Tenkan-sen at 112.12, with the Kijun-sen lying not far above at 112.56. Higher still, the focus would turn to 113.14, where the 50- and 100-period moving average lines have converged; notice that the two look set to post a bearish cross.
Conversely, USDJPY is likely to extend its move lower on the back of disappointing US figures. A first line of support may take place around 111.66, this being a previous low. Further below, the 111 round figure could provide additional support, with the focus turning to early September’s near two-month low of 110.37 in the event of steeper losses.
US equity market losses triggering a flight to safety will also probably benefit the yen.
Origin: XM
