USDJPY Likely Forming A Short-term Top

USDJPY Likely Forming A Short-term Top

By: Simon Furman | Where To Trade | On:13-03-2015 11:46
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Key Highlights

  • US dollar after trading near the 122.00 level failed to continue to trade higher and corrected lower.

  • In the New Zealand, the Business NZ PMI pointing business conditions in New Zealand released by the Business NZ registered a reading of 55.9 in February, compared to the last month reading of 50.9.

  • Singapore unemployment rate representing the percentage of the total work force that is unemployed was released which some action in the Singapore dollar pairs.

  • Japanese Industrial Production released by the Ministry of Economy, Trade and Industry measuring outputs of the Japanese factories and mines will be released today for January 2015, compared to the same month a year ago and the last time gain was of 1%.

  • In terms of the monthly change the Japanese Industrial Production will also be released for January 2015.

  • Japanese Capacity Utilization representing the percentage of the Japanese production capacity which is actually used over the short-time period will be released around same time and expected to post gains.

  • Canadian employment report will be one of the major releases today, which has the potential to cause a lot of volatility in the Canadian dollar pairs especially in USDCAD.

USDJPY

The US dollar finally showed some signs of weakness as it traded lower against the Japanese yen. The USDJPY pair was seen struggling around the 122.00 resistance area and as a result the pair moved lower. There was a bullish trend line formed on the 4-hour chart, which was breached by the US dollar sellers. However, the best part is that there is one more trend line waiting on the downside for the pair to act as a support in the near term. We need to see how the pair trades moving ahead and whether it can trade back higher or move lower to challenge the next bullish trend line.

Intraday Support Level – 120.60

Intraday Resistance Level – 121.80

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

  • A break above the 121.80 level could ignite more gains moving ahead.

If the USDJPY pair continues to move lower from the current levels, then a test of 120.60 support area is possible in the near term where sellers might struggle.

EURJPY

The EURJPY pair one of the top losers among the yen pairs which traded lower towards the 127.00 level. This was more due to the losses in the Euro and had less to do with the yen gains. There is a bearish trend line formed on the 4-hour chart of the EURJPY pair, which might act as a swing area for the pair in the near term. However, there are several barriers ahead of the highlighted trend line.

Intraday Support Level – 128.20

Intraday Resistance Level – 129.50

  • Selling rallies around the 129.50 level look like a good option.

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

On the upside, the pivot area is around 129.50, followed by 130.00.

 

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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