USD/JPY falls as North Korean crisis escalates
Morning outlook - USD/JPY falls as North Korean crisis escalates
- In result of a new ballistic missile test conducted by North Korea, the American Dollar lost 0.57% against the Japanese Yen just in two hours.
- Accordingly, in the first half of Tuesday the buck is expected to try to recover some of the lost value. However, even if it succeeds to break through the upper boundary of a junior descending channel, the pair most likely will fail to climb above 109.28, as this resistance level is reliably protected by a combination of the weekly PP and the 55-, 100- and 200-hour SMAs.
- In addition, there is a need to take into account another fundamental event that will happen at 14:00 GMT, i.e. a release of data on the US CB Consumer Confidence.
Among all major currency pairs, the greatest impact from a release of information on the US CB Consumer Confidence suffered the Yen, which lost 1.13% in value in seven hours.
Today the buck is expected to continue the soar at least until it will encounter a combined resistance level set up by the weekly R1 at 109.92 and the senior channel’s upper boundary.
Given that from the southern side all technical barriers are located below the 109.28 level, a rebound is likely to happen.
However, there is also a need to take into account a reaction of traders on release of the two key US macroeconomic data sets today, which are likely to stimulate appreciation of the buck even more.
To put differently, if the released data justifies experts expectations, the pair will break out of the channel in the northern direction.