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USD/JPY surges above 109.00

ByXM Group
AuthorTrading Point
Published 10/30/2014, 04:04 AM
Updated 02/07/2024, 09:30 AM

The US dollar staged a powerful rally after the FOMC statement on Wednesday, crossing above the 109 level against the yen at around 109.08 and driving euro / dollar below the 1.27 and then the 1.26 handles by trading at 1.2595. Stocks posted very modest losses.The Federal Reserve appeared more confident than the market expected on the US economy. The Fed decided to stop its monthly bond purchase program known as QE, as was widely expected. What was less expected was the relatively upbeat assessment of the US economy, as it said the “underutilization of labor resources is gradually diminishing”. The Fed did not appear particularly worried about the possibility of low inflation.

USD/JPY is back on the upside after consolidating around the key technical level of 108.00 earlier this week. The hawkish FOMC statement acted as a catalyst for a surge higher and resulted in a daily close above this key 108.00 level. Prices are now into the next handle at 109.00. The market has retraced 78.6% of the downleg from 110.08 (October 1 high) to 105.19 (October 15 low).

Momentum is bullish as the RSI is above 50 and rising. There is scope to target the October 1 high of 110.08. The kijun-sen line has turned positive.

To the downside, support is seen in the area between 108.00 and the top of the Ichimoku cloud at 108.15.

USD/JPY Daily Chart

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