FX JPY Analysis 28 June 2011
FXFXFX.com 2011-06-28 12:38:33 AM GMT +0800
FX JPY Analysis 28 June 2011
Underpinned by yen-funded carry trades amid improved investor risk sentiment (VIX fear gauge eased 2.56% to 20.56), U.S. stocks''''s sharp gains overnight (DJIA up 0.91%, Nasdaq up 1.33%) on less-onerous-than-expected banking capital requirements from international regulators, French banks'''' offer to roll over portion of their Greek debt holdings which boosted optimism over private-sector involvement for new Greek bailout; easing concerns over further monetary tightening measures from China after Premier Wen said Beijing is able to cap inflation below 5% this year. USD/JPY also supported by higher U.S. Treasury yields, USD demand for Japan import settlements. But USD/JPY gains limited by Japan exporter sales, weaker USD sentiment (ICE spot dollar index last 75.28 vs 75.66 early Monday) on disappointing U.S. May personal spending (flat vs +0.1% expected) & income (up 0.3% vs +0.4% expected); plunge in Dallas Fed general business activity index to minus 17.5 in June from minus 7.4 last month; uncertainty over raising of U.S. debt ceiling by Aug. 2 deadline. Data focus: 2350 GMT Japan May preliminary retail sales, 1300 GMT U.S. April S&P/Case-Shiller home price index, 1400 GMT U.S. June consumer confidence index, 1400 GMT June Richmond Fed business activity survey, 1700 GMT Fed''''s Fisher speech. USD/JPY daily chart positive-biased as MACD & stochastics in bullish mode; 5- & 15-day moving averages rising. Resistance at 80.98 (yesterday''''s high), then at 81.08 (June 15 high, near 55-day moving average); breach would target 81.33 (June 2 high), then 81.57 (June 1 high), 81.77 (May 31 high, matching 100-day moving average) and 82.23 (May 19 high). Support at 80.63 (hourly chart), then at 80.29 (yesterday''''s low), 80.13 (Friday''''s low) and 80.01-79.96 band (Wednesday''''s low-June 10 low); breach would expose downside to 79.57 (May 5 reaction low), then 78.44 (76.4% Fibonacci correction of advance from March 17 record low of 76.25 to April 6 high of 85.53).