16.09.201409:30 Forex Analysis & Reviews: Technical analysis of USD/JPY for Sep 16, 2014

Long-term review

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Fundamental Overview:

USD/JPY is expected to consolidate with a bullish bias. It is undermined by the lower U.S. Treasury yields (10-year at 2.591% versus 2.609% late Friday), diminished investor risk appetite (U.S. stocks closed mixed overnight with S&P 500 off 0.07%, DJIA up 0.26%; VIX fear gauge rose 6.09% to 14.12) on news that China's industrial growth slowed to a six-year low in August, jitters about the Scottish independence vote on Thursday and caution before Federal Reserve's interest rate decision on Wednesday. USD/JPY is also weighed by Japanese exporter sales. But USD/JPY downside is limited by the demand from Japanese importers and the positive USD sentiment as much-stronger-than-expected rise in Empire State's business conditions index to 27.5 in September from 14.7 in August (versus forecast 16.0) outweighs surprise 0.1% drop in U.S. August industrial production (versus forecast +0.3%) and lower-than-expected capacity utilization of 78.8% (versus forecast 79.3%).

Data focus:
0535 GMT Bank of Japan Governor Haruhiko Kuroda speech
1230 GMT U.S. August PPI
1300 GMT U.S. July Treasury international capital data.

Technical comment:
Daily chart is still positive-biased as MACD is bullish, stochastics stays elevated at overbought zone, 5 and 15-day moving averages are advancing, although inside-day-range pattern was completed on Monday.

Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 107.50 and the second target at 107.85. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 106.60. A break of this target would push the pair further downwards and one may expect the second target at 106.20. The pivot point is at 106.90.

Resistance levels:
107.45
107.80
108.15

Support levels:
106.60
106.20
106

Back to the list

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.