Search ForexCrunch

The hawkish comments by FOMC member sent Dollar/Yen to 82.37, a break above the previous resistance area and the highest level since the catastrophic earthquake.

USD/JPY had a hard time around the 81.80 – 82 region for quite some time. This line served as both resistance and support, and had a very distinctive role after massive intervention to weaken the Japanese. The coordinated efforts couldn’t push the pair above this line.

James Bullard, a member of the US Federal Open Markets Committee, not only hinted about not extending the quantitative easing program, but also hinted that interest rates could hiked even before the crisis ended. Such hawkish comments send the US to play in the same field as ECB’s Trichet’s comments, although there’s still a big difference.

But in Japan, no rate hike is seen in the visible future. The interest rate was lowered to 0-0.10% a long time ago, and will stay there, especially after the earthquake.

Further levels above are 82.87, where the previous BOJ intervention began, and then 83.40, the highest level before the earthquake and also a support line in the past. Support is now found at 82, followed by 80.90.

For more levels, see the Dollar Yen Forecast.