USDJPY parity continues to look negative view before FOMC minutes / Fed Chairman Powell speech on June 19th, BoJ meeting on June 20th, and President Kuroda speech. Although we have followed a recovery from 107.85 level in the last period, negative trend expectation remains in our agenda as it does not exceed 108.85 – 109.12 representing the trend region.
Japan’s Central Bank BoJ meeting is not expected to change the eyes of the U.S. Federal Reserve turned to. The answer to the question of whether FOMC members expect interest rate cuts in the remaining time of the year is critical to whether the USDJPY parity will continue its negative trend outlook. In addition, Fed President Powell’s press release after the minutes strengthens the USDJPY parity’s expectation to create a moving pricing ahead of closing.
Main scenario: The USDJPY parity continues to look negative under the 109,12 – 108,58 zone above the upper point of the downward trend. The parity may retreat to the 107.85 and 107.35 support if the trend continues to meet expectations. In particular, the downward breach of 107.85 may strengthen the prospect of accelerating sales pressure and possible withdrawal towards 106.85 support, the current downside of the downtrend. Otherwise, recovery can be monitored in 109,12-108.58 zone.
Alternative Scenario: Movements over 109,12 – 108,58 should be monitored in order to end the negative expectation for USDJPY parity and to ensure that a positive opinion can take precedence. However, with this condition, new pricing towards 109.70 and 110.23 and 110.88 levels can be followed.
Pivot: 109,12 – 108,58
Support: 107,85 – 107,35 – 106,85
Resistance: 108,58 – 109,12 – 109,70