As US alarm clocks start going off, dollar yen trades though the next batch of strong orders at 102.50/40 as the selling from Friday continues. There wasn’t many expecting BOJ action this month and we’re unlikely to do so until the effects of the sales tax are known. Whatever the reason, bears are in charge at the moment and there’s no let up.
Even with the recent moves we’re still within the well trodden path of the 2014 range.
USD/JPY daily chart 08 04 2014
We’re still treading water as far as I’m concerned and there’s nothing really to suggest that we see a break of the range just yet. While the market may have been disappointed with the US data and maybe a lack of BOJ printing rhetoric we’re still going to be driven by the data. It’s not a strong week of data for the US so that could keep the bears in control. The FOMC minutes are probably the main risk but even that is a long shot for action as there’s unlikely to be anything different from what we got from the announcement and Yellen’s press conference. Whether her “6 months” are touched upon might be the only flammable part of it.
I’ll be looking for the bottom of the channel to hold, but a break could see a bigger push to the downside with 101.20/30 the level to watch thereafter.
Once again we’re going to be taking a lead from the States so we’ll need to keep an eye on stocks and bonds. S&P futures are showing a small loss will Nikkei futures have come off around 1%. US 10’s are slightly back into 2.709% from 2.695%