USD/JPY Daily Commentary for 4.24.09
The USD/JPY has declined below our 1st tier downtrend line and is flirting with very dangerous territory. Its recent downturn could indicate that a large selloff is pending. However, the USD/JPY’s deterioration is puzzling since the EUR/USD and GBP/USD are breaking out while the S&P futures play with the idea of a brighter future as well.
This development in the USD/JPY is mysterious since the currency pair has been positively correlated with all of these other investment vehicles throughout the crisis. Could the present performance of the USD/JPY be hinting at an overall depreciation in the Dollar as analysts have forewarned?
Since we haven’t seen any game-changing news from Japan over the past 24 hours and the U.S. reported stronger than expected Durable Goods Orders, our speculation is certainly plausible. However, we would have to witness a clear follow through in order to make a more convincing argument. The USD/JPY could simply be giving investors a head fake before it turns higher.
Fundamentally, we find resistances of 97.98, 98.56, 99.20, 99.79, and 100.28. To the downside, we see supports of 97.11, 96.33, 95.55, 95.04, and 94.48. The 100 level serves as a key psychological barrier with 95 acting as a psychological cushion. The USD/JPY is currently exchanging at 97.04.
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