USDJPY Soars Amid Fed Rate Hike Pessimism

 The USD/JPY pair closed with some tepid gains, with risk appetite putting the Japanese yen under pressure.

The pair reached the 120.70 region a couple of times intraday, but was unable to advance beyond the static resistance level. Short term buyers however, limited the slides during the American afternoon surging around 120.30/40, a strong Fibonacci support.

In short term, the 1 hour chart shows that the price consolidates near the high and above its 100 and 200 SMAs, whilst the technical indicators have lost their early upward strength, but hold well above their mid-lines.

In the 4 hours chart, the pair continues trading in a tight range right above a horizontal 20 SMA, whilst the technical indicators present a tepid upward slope in neutral territory, not enough to confirm further gains ahead.

Meanwhile stocks soared in the US, as worse-than-expected US inflation figures for August reduced chances of a FED rate hike this Thursday.

Also weighing on the Japanese yen was news that the S&P rating agency downgraded the country’s rating to A+ from AA-, due to slow economic growth and the increasing government debt.

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