Some traders turned to yen as safe haven currency as oil price suddenly dropped in the US session last Friday, while US jobs data might change the view that the Federal Reserve is going to raise rates gradually this year.
It seems that three years of stimulus by the Bank of Japan is making a progress as the yen appreciated as much as 6.8 percent in the first quarter of 2016. It that was the case, there would be a huge possibility for the yen to strengthen until the end of the year. However, as there is still an uncertainty within and outside of Japan as the long-term impact of negative interest rates policy, there could be some concerns whether BOJ still has any policy options left.
The intraday bias for USD/JPY is bearish. 20 MA and 50 MA are falling on hourly chart and the price currently is testing 20 MA. We can see that the price is pulling up, approaching the Fibonacci resistance area at 111.800-112.102. Hourly stochastic and CCI are overbought in general. As today’s trading strategy, we can look for bearish signal confirmation on a pull-back move to within the Fib’s resistance area to go short with target at 111.613 or 111.310 in extension. The level of 111.310 is today’s key support and the USD/JPY may keep falling if it breaks, with target at 110.961-110.669.
Intraday key resistance is at 112.102. Be careful if the price managed to break the resistance because it will turn the intraday bias to bullish and possibly will be followed by a bullish move up to 112.318-112.592.