usdjpy rejected just above 121 again 2297482015

At the end of last week USDJPY may a valiant attempt to break through resistance around 121.00-40, but failed once more. It appears this celling will prove to be tough for price to break above given the uncertainty surrounding the US dollar’s outlook in the near-term and the safe haven attractiveness of the yen in these volatile markets.

The US dollar juggling the notion of tighter interest rates in the US, as the Fed compares a strong economic recovery with a still weak inflation outlook and fears about global growth. Meanwhile, the same concern about the global economy is increasing the attractiveness of the yen, although it’s also being haunted by the prospect of further easing in Japan. The end result has pushed USDJPY into a fairly tight range as investors wait for more clues out the outlook for monetary policy in both countries and the health of the global economy.

From a technical perspective, the pair is testing some short-term support around 120.30 at the time of writing. A break here could see bears attempt to push price through 120.00 once again; below here we are eyeing off support around 119.00/25. On the upside, the USDJPY’s rejection around 121.00 yet again means that bears may be overall control at the moment, although a break here could encourage more bulls to join a potential rally towards 121.50/75.

Source: City Index