USD/JPY Buying Pressure Now Looking To Slow Down
ForexTime | Sep 15, 2014 04:26AM ET
At the beginning of last week, comments from Koichi Hamada (an advisor to Prime Minister Shinzo Abe) that a weak JPY was “positive for Japan’s economy” allowed investors to price in future stimulus from the Bank of Japan (BoJ). This encouraged widespread JPY weakness and the USD/JPY reached its highest valuation since September 2008.
However, comments from BoJ Governor Kuroda on Friday morning that although the central bank is prepared to add stimulus if necessary there are no plans presently to do so, cooled buying pressure down as the week concluded. Next week sees a high quantity of economic data released from both Japan and the United States and as such, the USD/JPY should experience volatility.
From Japan, the latest Japanese Trade Balance is released on Wednesday with Machine Tool Orders on Thursday and Tokyo Department Sales on Friday morning. In regards to the Unites States, the latest Industrial and Manufacturing Production data is released on Monday. This is followed by CPI (Inflation) and the latest Federal Reserve FOMC Decision on Wednesday evening.
From a technical standpoint on a Daily timeframe, a bullish trendline remains in control of the pair but both the RSI and Stochastic Oscillator are now located inside the overbought boundaries. This suggests the pair could be about to experience a pullback. In which case, potential support can be found at 106.810 and 106.191.
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