The USD/JPY has tumbled below its highly psychological 90 level as investors divert from the risk trade across the board. More uncertainty in Greece coupled with discouraging U.S. unemployment claims has sent investors towards safety, and the Yen is obviously clearly from this movement. Meanwhile, there has been no new news concerning the BoJ changing its neutral monetary policy stance. This stance is likely benefitting the Yen during moments of risk aversion since investors aren't pricing in looser liquidity in the near future. Japan will release CPI, industrial production, and retail sales data tomorrow. Attention will likely be focused on the Tokyo Core CPI since the DPJ's concern about deflation has been at the center of conversations lately. Should consumer prices print weaker than anticipated the administration could place more pressure on the BoJ to loosen liquidity. On to other hand, solid CPI data could benefit the Yen since such a development could relieve pressure from the BoJ to take action. The UK will release Revised GDP data tomorrow followed by Prelim GDP numbers from the U.S. Hence, the FX markets could end the trading week on a volatile note.
Technically speaking, the USD/JPY has dropped beneath our 3rd tier uptrend line and has our 1st and 2nd tiers serving as supports for the time being. Meanwhile, the USD/JPY is getting closer to a retest of February lows, so it will be interesting to see if the currency pair can stabilize from here. As for the topside, the USD/JPY faces multiple downtrend lines and the psychological 90 area is now serving as a technical barrier.
Present Price: 89.02 Resistances: 89.10, 89.19, 89.28, 89.41, 89.54, 89.67 Supports: 88.93, 88.85, 88.73, 88.54, 88.36, 88.26 Psychological: 90, February lows