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USD/JPY Threatens 101.50 Support- Bearish RSI Break Favors Downside

USD/JPY Threatens 101.50 Support- Bearish RSI Break Favors Downside

2014-05-06 15:00:00
David Song, Currency Strategist
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Talking Points:

- USDOLLAR Eyes October Low (10,354) Ahead of Yellen Testimony

- GBP/USD Targets 1.7000-20 Going Into BoE Policy Meeting

- USD/JPY Stalls at 101.40-50 Support; RSI Fails to Preserve Bullish Momentum

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) looks poised to give back the advance from October (10,354) as it continues to carve a series of lower highs & lower lows in May.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10382.23

10445.3

10378.9

-0.61

235.47%

Indeed, the reserve currency looks to have marked the high for the month as it continues to respect the descending channel from earlier this year, and the bearish sentiment surrounding the reserve currency should gather pace going into the second-half of 2014 as long as the Federal Reserve remains reluctant to move away from its easing cycle.

With Fed Chair Janet Yellen scheduled to speak later this week, more dovish remarks from the central bank head is likely to produce a further decline in the greenback, and we will continue to look for opportunities to ‘sell bounces’ in the dollar as the bar remains high to see a material shift in the Fed’s policy outlook.

USD/JPY Threatens 101.50 Support- Bearish RSI Break Favors Downside

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Read More:

Price & Time: Do or Die for the Euro

USD/JPY Looks Towards Yearly Low; EUR/USD Breakout Waits for ECB

USDOLLAR Daily

USD/JPY Threatens 101.50 Support- Bearish RSI Break Favors Downside

Chart - Created Using FXCM Marketscope 2.0

  • October Low (10,354) in Focus as Dollar Searches for Support
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,354 to 10,375 (50.0 retracement)

Release

GMT

Expected

Actual

Trade Balance (MAR)

12:30

-$40.4B

-$40.4B

IBD/TIPP Economic Optimism (MAY)

14:00

47.9

45.8

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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