USDJPY Has More Upsides Left; EURJPY To Weaken Further

USDJPY Has More Upsides Left; EURJPY To Weaken Further

By: Simon Furman | Where To Trade | On:06-03-2015 10:50
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Key Highlights

  • Euro spike against the US dollar and the Japanese yen was short-lived, as the Euro sellers managed to contain upsides in the near term in EURUSD and EURJPY.

  • Australian HIA/AIG Performance of Construction Index, released by the Australian Industry Group and the Housing Industry Association managed to register a reading of 43.9 in February 2015, compared to the last reading of 45.9.

  • Japanese Foreign-exchange reserves i.e. foreign currency deposits and bonds held by central banks and monetary authorities was released by Ministry of Finance, which registered a reading of $1,251.1B, compared to the last reading of $1,261.1B.

  • Japanese Leading Economic Index i.e. economic indicator that consists of 12 indexes such as account inventory ratios will be released by the Cabinet Office today for January 2015.

  • Japanese Coincident Index i.e. single summary statistic that tracks the current state of the Japanese economy will be released today for January 2015, as the last reading stands at 110.7.

  • US nonfarm payrolls and the unemployment rate will be released today, which might cause a lot of moves in the US dollar in the short term.

USDJPY

The US dollar spiked sharply against the Japanese yen towards the 120.40 level, but the US dollar sellers managed to protect any further gains in the pair. The USDJPY pair was seen correcting lower after the failure. However, there is a bullish trend line on the 4 hour chart of the USDJPY pair, which is likely to act as a catalyst in the near term. Moreover, the 38.2% fib retracement level of the last leg from the 118.25 low to 120.36 high is also sitting around the same area. So, one might say that there is a major support around the 119.50 level where the US dollar buyers could appear.

Intraday Support Level – 119.50

Intraday Resistance Level – 120.36

  • Overall, as long as the pair is above the trend line it might continue trading higher.

  • A break below the same could ignite more losses moving ahead.

If the USDJPY pair moves higher and clears the 120.40-50 resistance area, then a run towards the 121.00 swing area is possible in the short term.

EURJPY

The ECB interest rate decision acted as a catalyst for the Euro recently, which ignited more downsides. The EURJPY pair was also seen trading lower, as it broke a critical support trend line on the 4 hour chart, which later acted as a resistance for the pair. The pair was seen flirting with the 132.00 support area, and it would be interesting to see whether the Euro buyers can manage to break it or not in the near term. A beak below 132.00 might take it towards 131.50.

Intraday Support Level – 132.00

Intraday Resistance Level – 133.00

  • Selling rallies around the broken trend line look like a good option.

  • A break above the same might call for more gains moving ahead.

On the upside, the 133.00 resistance level might continue to act as a resistance moving ahead.

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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