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18 Jun 2013
Flash: USD/JPY could see another leg lower after Fed - DailyFX
FXstreet.com (Córdoba) - As the FOMC meeting gets underway, Christopher Vecchio, Currency Analyst at DailyFX notes that with markets geared for a disappointment – expectations are firmly biased towards a reduction in QE3 – anything close to a hold with a neutral tone could provoke one last leg lower in the USD/JPY.
"After topping on May 22 at 103.73, the USDJPY has been following the bearish path of a Rising Wedge, drawn from the April 2 low at 92.55. Similarly, the break below 95.20 last week may have also initiated another bearish pattern, a Broadening Wedge, drawn from the February 25 low at 90.84", says Vecchio.
"Accordingly, a break below 93.75 (last week's low) amid neutral/dovish commentary from the Fed and a sustained high pace of QE3 should prompt the next moves lower to 92.55 then potentially 90.84 over the coming week", he concludes.
"After topping on May 22 at 103.73, the USDJPY has been following the bearish path of a Rising Wedge, drawn from the April 2 low at 92.55. Similarly, the break below 95.20 last week may have also initiated another bearish pattern, a Broadening Wedge, drawn from the February 25 low at 90.84", says Vecchio.
"Accordingly, a break below 93.75 (last week's low) amid neutral/dovish commentary from the Fed and a sustained high pace of QE3 should prompt the next moves lower to 92.55 then potentially 90.84 over the coming week", he concludes.