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USDJPY – 114.00 Too Much?
We saw an interesting reaction from USDJPY today. After much hotter than expected PPI data the currency pair actually sold off hitting a low of 113.45 before finding a bottom. When a currency pair sells off on strong positive news it’s usually a sign that the rally is tired.
After a relentless move higher that took it up more than 800 points in three weeks USDJPY may be finding some resistance at the 114.00 level as bulls run up against multi-month highs that could contain the move for a while.
Tomorrow the market will get a look at the key US Retail Sales number which is expected to rebound to 0.6% from -0.2% the month prior. US will also release the CPI figures which could confirm the inflationary pressures of today’s PPI report. If those two data points fail to push the pair higher then USDJPY may be in for a more serious corrective move towards the 112.00 figure. If the data provides a downside miss, it could show the market just how much support there is around the 113.00 level as shorts will no doubt try to press the pair lower.