- USD/JPY is extending the bearish momentum for the third straight session, falling Japanese stocks trigger fresh demand for the yen
- Nikkei drops -0.64 to 18,204, markets also wary as they await re-opening of the Chinese markets after a holiday
- Poor Japan data released earlier ignored by markets, core machine orders fell -3.5% (forecast +3.5%), trade balance came in at a deficit of 326.1 bln yen, following the 108.0 bln yen shortfall in the previous month
- Gains in the yen however remain capped by expectations that the Bank of Japan will unveil more stimulus steps as early as this month
- Higher U.S. Treasury yields underpinned the dollar, USD stood tall against a basket of currencies in early Asian trading
- USD/JPY is currently holding at 119.85, edging slightly higher from session lows at 119.82
- Strong support is seen at 119.63 levels, and resistance on the upside is located at 119.85 (cloud top) ahead of 120 (psychological level)
Recommendation: Wait for breaks below 119.60 to go short, target 118.80, stops 120.20
The material has been provided by InstaForex Company – www.instaforex.com