The USD/JPY continued its slight selloff despite a late session rally in U. S. equities. We still don't feel the present pullback in the USD/JPY is backbreaking, yet.

The currency pair has our 2nd tier uptrend line to rely on for the time being. However, as we stated before, the uptrend is extremely young compared to the downtrend, giving the downside precedence.

On the other hand, everybody knew the crucial 100 level would be a tedious obstacle to overcome. We continue to witness a battle of the economies.

The Japanese economy deteriorated to such a point that the Yen lost its luster as a safe haven. Then again, the Dollar has joined the party via quantitative easing, resulting in overall weakness against other major Dollar pairs and in succession stalling a possible breakout in the USD/JPY.

Regardless, the USD/JPY should yield to its positive correlation with U. S. equities should the S&P futures have a breakout of their own past February highs.

The economic data from the U. S. is mixed while Japanese data remains highly negative for the most part. Therefore, there are more than enough reasons to believe the uptrend in the USD/JPY can hold itself together.

On the other hand, we've still got those three downtrend lines bearing down on price. Fundamentally, our 99.79 support turns resistance while we maintain our resistances of
100.28, 100.71, 101.44, and 101.98.

To the downside, we hold our supports of 99.06, 98.16, 97.59, and 97.11 with fresh bottom-end of 96.33. The USD/JPY is currently exchanging at 98.99.

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.  

Disclaimer: For information purposes only. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. There is a substantial risk of loss in trading futures and foreign exchange.