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Spot USD/JPY Struggles At Key Resistance

JPY

Spot USD/JPY failed to make a convincing break of 106.20 today, testing the level twice on Wednesday and receding both times. The pair last flat on the session at 105.87.

  • NKH have reported that Seiko Hashimoto, minister for the Olympics and gender equality, is set to be selected as the new head of the Tokyo Olympics organizing committee which could provide clarity on the games amid widespread criticism over staging a major global sports event during a pandemic in a country that only began its vaccine roll out this week.
  • From a technical perspective USD/JPY found support last week at the Feb 10 low of 104.41 and bulls have since not looked back. Tuesday's climb resulted in a break of resistance at 105.77, Feb 5 high. This confirms a resumption of the uptrend that started Jan 6 and reinforces the significance of the recent key technical break - the breach on Jan 27 of the bear channel resistance drawn off the Mar 2020 high. The focus is on 106.26 next, a Fibonacci projection.
  • Japan will sell 20-year bonds today, and final machine tool orders for January are published. Broader focus will fall on the return of Chinese markets from the LNY break

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