FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained the USD/JPY’s pair action prior to Yellen’s comments boosting the greenback.
Key Quotes:
“USD/JPY sunk to near the base of this last month range, posting 119.21 before bouncing back sharply in the American afternoon, recovering alongside with Wall Street, which erased most of its intraday losses before the closing bell. The Japanese yen has been trading purely on sentiment, strengthening despite poor Markit manufacturing readings in Japan, showing the economic slowdown coming from China continues spreading into the region.
The pair is pressuring the 120.00 level ahead of the Asian opening, with the 1 hour chart showing that the technical indicators have bounced sharply from oversold levels and are aiming to cross their mid-lines towards the upside, whilst the 100 and 200 SMAs, stand flat a few pips above the current level.
In the 4 hours chart, the price is back around an horizontal 20 SMA, whilst the technical indicators aim higher around their mid-lines. Overall, the pair maintains the neutral tone seen on previous updates, still contained within Fibonacci levels, and will likely remain so until the next Friday October 2nd, when the US will release its September Payrolls figures.”
(Market News Provided by FXstreet)