Can Yen Retain Bullish Tone?

Key Highlights

• Japanese yen was seen trading in a broad range against the US dollar, but there was a slight bullish tone witnessed which might continue in the near term if buyers remain active moving ahead.

• In the US, Fed's Stanley Fischer speech was scheduled which failed to help the US dollar.

• Japanese Consumer Confidence measuring the level of sentiment that individuals have in economic activity released by the Cabinet Office will be released today for the month of March 2015 with the last reading of 40.7.

• Several important risk events are lined up today in the Euro zone, UK, US and Canada.

• In the Euro zone, the Consumer Price Index released by Eurostat, which is expected to gain by 0.6%.

• In the UK, the employment report will be released with the expectation of a decline in the unemployment rate in February 2015

• In the US, the Consumer Price Index will be released with the forecast lined up for no change in the CPI.

• Even in Canada the Consumer Price Index (CPI) released by the Statistics Canada is expected to post no change for March.

USDJPY

The US dollar declined against the Japanese yen recently, but the 118.70-80 levels acted as a barrier for sellers. The USDJPY pair was seen correcting higher, but there is a bearish trend line formed on the 4-hour chart which might act as a catalyst for the pair in the near term. Currently, the pair is trading near the 23.6% fib retracement level of the last leg from the 120.80 high to 118.75 low. A break above the highlighted trend line could take the pair higher. However, there is a monster resistance forming around the 50% fib level, as the 100 and 200 simple moving averages are aligned around the same area. So, buyers might face a tough time around the 119.80 levels.

Intraday Support Level – 118.60

Intraday Resistance Level – 119.80

• Overall, as long as the pair is below the bearish trend line it might continue moving lower.

• A break above the same could ignite more gains moving ahead.

If the USDJPY moves lower from the current levels, then the pivot area of 118.60 might act as a support to the pair.

EURJPY

The Euro performed well against the Japanese yen compared to the US dollar. There was a bearish trend line which was cleared by the shared currency buyers. Moreover, the 23.6% fib retracement level of the last leg from the 120.80 low to 118.75 low was also breached. However, the pair is currently struggling to clear the 38.2% fib level. The 129.00 area holds the key for the pair in medium term for more gains.

Intraday Support Level – 127.00

Intraday Resistance Level – 128.10

• Buying dips around the broken trend line looks like a good option.

• A break below the same might call for more losses moving ahead.

If the EURJPY pair continues to gain traction, then the next major stop as mentioned is around 129.00 where the 200 SMA is aligned.  

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