Japanese Yen Continues To Lose Ground As Dollar Corrects Lower

Japanese Yen Continues To Lose Ground As Dollar Corrects Lower

By: Simon Furman | Where To Trade | On:27-01-2015 10:08
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Key Highlights

  • Euro trying to recover some ground, but faces an uphill task as there are several resistances on the way up for the EURUSD pair.

  • Japanese yen continued to move lower and declined against the US dollar and British pound.

  • Japanese Corporate Service Price Index (CSPI) released by the Bank of Japan increased by 3.6% in December 2014, compared with the same month of the preceding year.

  • Australian National Australia Bank Business Confidence came in at 2 in December 2014, compared with last reading of 1.

  • Australian National Australia Bank Business Conditions was also released, which stood at 4 in December 2014, compared with last reading of 5.

  • Conference Board LEI for China was released, which registered a reading of 1.1, compared to the last reading of 0.9.

  • NZDUSD continued to move lower as buyers fail to defend the key support area.

EURUSD

The Euro was slammed recently against the US dollar as it traded below the 1.1100 support area, but spiked back up later. The Euro buyers managed to protect the downside, but it does not mean that the downside pressure is decreased on the EURUSD pair. The pair recently climbed above the 23.6% fib retracement level of the last leg from the 1.1647 high to 1.1095 low. There is a monster bearish trend line on the 4 hour chart, which might act as a barrier for the pair in the near term if it climbs higher. Immediate resistance is around the 38.2% fib retracement level.

Intraday Support Level – 1.1200

Intraday Resistance Level – 1.1370

  • Overall, as long as the pair is below the 1.1400 area it might continue trading lower.

  • A break above the mentioned area could take the pair towards the 1.20 level.

On the downside, the recent low of 1.1100 level could act as a support. A break below the same might take the pair towards the 1.10 area.

GBPJPY

The British pound is likely forming a double bottom pattern against the Japanese yen, which might take the pair higher in the near term. One more positive sign was the break of a bearish trend line on the 4 hour chart, which is signaling more upsides in the GBPJPY pair. The pair even cleared the 50% fib retracement level of the last leg from the 180.23 high to 175.75 low. It is likely moving towards the 100 moving average where sellers might take a stand in the near term. If buyers managed to clear it, then a break above the 180.00 level is possible moving ahead.

Intraday Support Level – 178.00

Intraday Resistance Level – 179.00

  • Buying dips around the 177.50 level look like a good option.

  • A break below the mentioned level would call for more losses moving ahead.

On the downside, the 178.00 is an immediate support, which if breached might take the pair below the 177.00 level. In the short-term, the broken trend line might also act as a major support for the GBPJPY pair.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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