The USD/JPY bottomed out yesterday despite the pullback in U.S. equities since investors were reacting to weaker than expected GDP data from Japan. The setback in Japan's GDP gave investors a good reason to halt the Yen's appreciation and favor the Dollar. However, today's pop has failed to breach the USD/JPY's important 1st tier uptrend line. U.S. data has also come in below analyst expectations today, putting the economic comparison between the two nations in a deadlock. Therefore, it seems the USD/JPY could follow the S&P futures closely for the immediate-term, particularly to the downside. Further deterioration in U.S. equities could motivate traders to head for safety and favor the Yen. The USD/JPY should ultimately correlate to the performance of economic data. Disappointing U.S. data would likely knock equities lower and appreciate the Yen.
Meanwhile, bulls will attempt to build a new base above the psychological 95 level and get the USD/JPY back above our 1st tier uptrend line. However, it seems the downside has more momentum for the time being. The USD/JPY will look to our 1st tier uptrend line, May lows and March lows for support. The next data release having an impact on this currency pair will be U.S. weekly Unemployment Claims on Thursday.
Present Price: 94.70
Resistances: 94.95, 95.15, 95.44, 95.65, 96.08
Supports: 94.52, 94.36, 94.08, 93.88, 93.52