Yen struggling to find support ahead of US payroll data
March 10th - Upbeat expectations over US non-farm payrolls and a bigger than forecast decline in Japanese machinery order data released overnight are just some of the factors that have combined to leave the Yen under pressure through the Asian session. This trend of depreciation has been seen despite yesterday’s news from the Bank of Japan that the extended phase of ultra lax monetary policy had come to an end and clearly with expectations – reinforced by the futures market – that rate hikes at the Fed will continue in the months ahead, it’s going to prove difficult for the Yen to find much support from the fundamentals. Obviously any surprises in today’s data – and particularly the US non-farm payrolls – could result in some downside pressure on the greenback but for the time being, market consensus appears to be one of consolidating long dollar positions. Key technical levels to watch for with USD/JPY in the medium term appear to be resistance at the February 21st highs around 119 and support around 117.20 - the 50% retracement of the sell-off in the last week of February.
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