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FxPro Forex Analysis: USDJPY and EURJPY Analysis – May 23, 2018

The Japanese Yen (JPY) is benefiting from risk-off sentiment today with the USDJPY pair plunging below the 110.00 level. A number of factors are combining to trigger the move including geopolitical tensions in Iran, trade war rhetoric between US and China, political turmoil in Italy, and renewed concerns over North Korea. The US 10-year Treasury yields have also dropped sharply to 3.015%. The focus for today will be the release of latest FOMC meeting minutes, which may give clues to the central bank’s near-term monetary policy outlook. If the text reinforces the expectations for three rate hikes for 2018, the US Dollar may continue to strengthen.

USDJPY
On the 4-hourly chart, USDJPY has broken channel support and a close below 110.00 opens the way to further declines towards the 38.2% retracement at 108.80 with support at 109.25. A break of 108.80 could see a deeper retracement to the 107.00 handle. A bullish reversal and break of 110.40 is needed to resume the uptrend to the highs at 111.40.

USDJPY(£)H4-23May

EURJPY
On the daily chart, EURJPY is attempting to break the 38.2% retracement of the low from March 2017 at 129.00. A break of this level opens the way to further declines towards the 50% retracement at 126.30 with supports at 128.30 and 127.50. On the flip-side, a reversal above 129.00 will find resistance at 130.20 and 131.10.

EURJPY(£)Daily-23May



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