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USD/JPY Monday’s open at 105.61 and Friday’s end at 105.38 evidence the lack of overall direction. The reigning down-channel continues to order trading whereas risk-off is the predominant sentiment, Joseph Trevisani, an analyst at FXStreet, reports.

Key quotes

“The upper border of the inner channel descends from 105.80 to about 105.50 next week so even a sideways motion in the USD/JPY will, by Thursday or Friday bring it into contact. As we saw this week the likely response in the USD/JPY at that point is lower.”

“There is minor support at 104.60 but its position in the middle of the channel means that a move through has little overall import. Above the market the first resistance is at 106.00 followed by 106.50. A rise to these levels would not negate the incline as the wider channel which has its origin in the March panic would remain in place.”

“The downtrend in the USD/JPY is not a strong move based on economic or rate differentials but is the prevailing notion largely due to the lack of any alternative. A rousing recovery in the US economy would make short work of the weaker dollar but that has yet to arrive.”