The USD/JPY is bouncing after touching the psychological 90 level and what is now our 2nd tier uptrend line. The USD/JPY has been under selling pressure since topping at our 1st tier downtrend line. The BoJ's minutes revealed the central bank is encouraged by recent performance of the Japanese economy, and is less inclined to add more liquidity to the monetary system. In fact, the BoJ all but reaffirmed its new hawkish stance towards the Yen with the DPJ looking to install a more conservative fiscal policy supportive of a stronger currency. The BoJ's minutes helped temper the USD/JPY's present run despite another solid performance from the S&P futures. Impressive Q3 earnings indicate the global economic recovery is coming along nicely, encouraging the BoJ that U.S. unemployment will decline and consumption increase. Therefore, the central bank may believe it is unwise to act now since an increase in U.S. consumption would likely weaken the Yen and help the USD/JPY stabilize naturally. However, the USD/JPY is still under a considerable amount of long-term downward pressure.
The USD/JPY presently faces multiple downtrend lines while the currency pair continues to have trouble leaving the psychological 90 level behind. In addition to the downtrend lines, the USD/JPY also needs to overcome previous October highs. Our 1st downtrend line serves as the first important obstacle since it represents a test of 9/21 highs and the concept of a more substantial near-term uptrend. As for the downside, the USD/JPY does have a few uptrend lines we can piece together and the psychological 90 level is now working the currency pair's favor. However, the USD/JPY is still awfully close to critical levels and is not in the clear yet. We are in the midst of a debilitating downtrend, meaning the USD/JPY likely needs a violent reversal to break free of its funk.
Present Price: 90.42
Resistances: 90.46, 90.63, 90.79, 90.98, 91.14, 91.35
Supports: 90.15, 89.92, 89.70, 89.57, 89.37, 89.15