USD/JPY started the week at 102.51, just above support at 102.50 . The pair touched a high of 102.70 and then lost strength, dropping to a low of 101.51. USD/JPY closed the week at 101.78.
Technical lines from top to bottom
We start with resistance at 108.38. This line has remained intact
since September 2008. At that time, USD/JPY was in a downward spiral
which saw it drop below the 0.90 level.
106.66 has held firm since November 2008. This is followed by
resistance at 105.70 which continues to provide strong resistance.104.65 saw a lot of action in December and January when the yen was trading at higher levels.
The round number of 104 follows. This was a key line back in May 2008 and is providing strong resistance.
102.50 continues to see activity. It is not a strong line and could face pressure early in the week.
101.44 was the post-crisis high seen in April 2009, and is the first line of support.
100.85 saw activity in July as the dollar showed strength against the yen. It is protecting the key level of 100.
The round number of 100 is a key psychological level. It is providing USD/JPY with steady support.
98.80 has remained firm since early November, when the dollar began a rally which saw it climb above the 105 line.
The final support level for now is 97.75. This line marked the start of a dollar rally in October, which saw the pair break above the 105 line.
I am neutral on USD/JPY
Japanese economic numbers have been steady and inflation continues to rise, albeit slowly. A strong GDP number early in the week could give a boost to the yen. In the US, employment numbers remain a concern, but the markets are content with the general direction of the US economy.
