Forex: USD/JPY back down on Yen strength

July 31st, 2010

Japanese yen is back up, recovering recent lost ground against greenback quoting around 86.30 after reaching a fresh yearly low at 85.94 with US worse than expected GDP data. According to Stoyan Mihaylov from www.deltastock.com, “with the break below 86.82 the consolidation pattern above 86.25 has been confirmed to be over and the bias is negative for 85.60, en route to 84.78. Initial resistance is seen at 86.62 and crucial is 87.15”.

Yen gains across the board extend, with EUR/JPY at 112.70 after reaching a weekly high of 114.75, back inside past 2 months trading range. Market seems not aware the FSA Japan (Financial Service Agency), has decided that all Forex brokers in Japan will be required to reduce their trading leverage to 1:50, from a 1:100 many have these days, becoming effective next August 1st; such decision, will no doubts affect JPY crosses next Sunday opening.

Source:fxstreet.com