The decline of oil price has triggered risk aversion and traders were looking for yen as safe-haven currency. The yen rally extended as USD weakened after the Federal Reserve chairwoman, Janet Yellen, said that low oil price could spark market volatility. Yen is strengthening against the greenback towards its 18-month high and market is wondering whether the Bank of Japan is capable to weaken the currency.

There is still uncertainty whether the Japanese government will continue to increase the sales tax to 10 percent from the current level at 8 percent, as low wage growth after the latest tax hike in April 2014 apparently has affected consumption.

Japanese Prime Minister Shinzo Abe possibly will make a move after assessing the country’s gross domestic product of the first quarter of 2016. The GDP data is going to be released in May.

USDJPY 5 APRIL 2016 FOREXTODAY

USD/JPY remains in bearish bias for intraday outlook. 20 MA and 50 MA are still falling on hourly chart and the price currently is moving below those MA’s. A pull-back move had occurred to the Fibonacci resistance area at 110.809, which is 50% Fib’s level. The price currently is heading south and possibly will test the intraday key support at 110.254. If the support breaks, you may consider to go short with target at 109.952 or 109.700 in extension.

Note that hourly stochastic has crossed up and CCI is rising from the oversold area. Therefore a pull-back move may re-occur. As alternative strategy, watch for bearish signal confirmation on a pull-back move to the resistance area at 110.809 with target at 110.516 or 110.254.

Remember that the resistance at 110.809 is 50% Fibonacci, which means it is an important intraday resistance. 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 111.126-113.363.

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