USD/JPY Risks Further Declines Amid Deviation in BoJ & Fed Policy

Talking Points:

- USDOLLAR Slips to Fresh Monthly Low; Bearish Setup Remain Intact Ahead of NFP

- USD/JPY Extends Decline as Bearish RSI Break Takes Shape

- EUR/AUD in Focus Ahead of RBA & ECB Policy Meetings

USDOLLAR(Ticker: USDollar):

• 
  Dow Jones-FXCM U.S. Dollar Index remains at risk for lower-highs & lower-lows in July as price and the Relative Strength Index (RSI) retain the bearish trends.
  


• 
  Still waiting & watching for the RSI to break below 40 to favor a further decline.
  


• 
  Even though Non-Farm Payrolls (NFP) are projected to increase 210K in June, the May (10,370) & October (10,354) lows remain the next key levels of interest as the Fed retains its current approach for monetary policy.
  

USD/JPY:

• 
  Slips to fresh monthly low of 101.30; close below 200-Day SMA (101.63) would be the first since October 2013.
  


• 
  Keeping a close eye on the RSI as it appears to be breaking down from the bullish trend from earlier this year.
  


• 
  Next key level of interest comes in at 101.00 (50.0% Fibonacci retracement from October advance).
  

EUR/AUD

• 
  Appears to have carved a series of lower-highs in June as pair retains bearish RSI momentum.
  


• 
  20-Day SMA (1.4506) lining up very nicely with near-term trendline resistance; favors looking for opportunities to ‘sell bounces’
  


• 
  Reserve Bank of Australia widely expected to retain its current policy, while European Central Bank (ECB) may sound increasingly dovish as they continue to implement non-standard measures.
  

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USDOLLAR Daily

Chart – Created Using FXCM Marketscope 2.0

• 
  Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  


• 
  Interim Support: 10,354 to 10,375 (50.0 retracement)
  

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— Written by David Song, Currency Analyst

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USD/JPY Risks Further Declines Amid Deviation in BoJ & Fed Policy