JPY Trading Outlook (11-02-2015)

USD/JPY Offers defending the daily Cloud top & the down TL off the Dec & Jan highs at 119.06/16 today were cleared and stops run above 119.25. The surge got to 119.625 in NorAm trading, very nearly completing the 76.4% of the Dec 23 to Jan 16 slide at 119.65. With little hard or clearly bullish news du jour in hand, a bout of light profit-taking ensued, but quickly found bidders by Monday and Friday’s 119.22-23 highs. Prices have steadied above there with help from Fed’s Williams & Lacker both sounding more convinced about the need for a rate hike by mid-year, regardless of any financial market volatility the higher rates might trigger. A close above the Cloud & the dn TL at 119.06/16 would strengthen the view that the correction from Dec’s high is over. Bolstering this case are today’s price push past the upper 21-day Bolli and the nascent spreading of those bands following 3-months of contraction. Moreover, this week’s range is wholly above the weekly Tenkan at 118.19; this after the Tenkan had been capping rallies most of last month. EUR/JPY may post its first close above the 21-DMA since Dec 12 today. 135.35 Feb 4 high is nearby into key EU-Greece meetings.