USD/JPY: outlook for February 20-24
USD/JPY managed to test resistance close to 115.00 as Trump didn’t criticize currency Japan’s policy at the latest meeting with Shinzo Abe, but then got rejected lower on the general setback in demand for the greenback.
The pair formed a shooting star candle against the 50-day MA. The force of this resistance has thus increased. However, the US dollar will have support around 112.50 (here was a buying interest in January). As long as the pair stays above this point, we’ll be looking for the opportunities for long positions. Below 112.50 focus on support at 111.40 and then 109.90.
Japan’s GDP growth slowed down from 0.3% in Q3 to 0.2% in Q4, although industrial production increased more than expected in December. Japan will release trade balance figures on Monday and flash manufacturing PMI on Tuesday. In addition, don’t forget to watch US data and FOMC meeting minutes. Finally, remember that USD/JPY is sensitive to changes in global risk sentiment. Demand for the safe havens may lead to further decline in USD longs and buying of JPY.