USDJPY, H1 and Daily
The dollar has lifted out of new lows were seen in Tokyo. The USD index (DXY) is now showing a fractional 0.1% gain after showing a 0.3% decline at the lows. The index left a 37-month low at 88.26, and is presently trading at 88.70. EURUSD tipped nearly 80 pips from the the 38-month high the pair saw in Asia in making its intraday low at 1.2474. USDJPY has scaled back above 106.20 after seeing a 15-month low at 105.54. However, in the bigger picture the pair remains in a strong downwards rally, since it is currently traded below the 2-year 61.8% Fibonacci retracement level. The next support comes at 104.50, which is taken from the resistance level noticed between August – October 2016. In case of a continuation of the upward correction, seen the last few hours, an upwards reversal for the pair can be consider possible, only if the pair reach breaks the 106.70- 107.50 resistance area, which is the area between the 23.6 and 31.8% Fibonacci level set since February 2.
The dollar’s decline to new lows in Asia and rebound in Europe mirrors the price action we saw yesterday, all amid a backdrop of rising global equity markets. More of the same expected, while the risk-on vibe persists, though advise caution for further bouts of volatility as major economies wean themselves off monetary stimulus.
Today’s U.S. calendar features January housing starts and January import prices, as well as preliminary February consumer sentiment.
Click here to access the HotForex Economic calendar.
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Andria Pichidi
Market Analyst
HotForex
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