Global macro overview for 13/07/2016:
The reason for the recent Japanese yen sell-off is a market rumor that the Bank of Japan might be preparing a 20 trillion yen package of fiscal stimulus as well as policy easing at month-end. The markets heard that before the latest BoJ interest rate decision last month the BoJ did not deliver the package and investors witnessed a massive reversal on Nikkei and yen-related pairs. It is worth to mention, that the current mood is a risk-on after better than expected NFP Payrolls, but it might change very soon as the central bankers are known for over-promise and under-deliver. The next BoJ interest rate decision is scheduled for Wednesday 27th of July.
Let's now take a look at the USD/JPY technical picture in the daily time frame. The bears are still in control over this market, because the price still trades below 55,100, and 200 DMA and the sequence of the lower lows and lower highs is still clearly visible. The next support is seen at the level of 103.52 and the next resistance is seen at the level of 106.85.
