Yen Looks Set For More Losses

Key Highlights

• Japanese yen tumbled against most currencies including the Euro and the US dollar, and it looks like it might continue to head lower in the near term.

• Australian AIG Performance of the Mfg. Index representing business conditions in the Australian manufacturing sector released by the Australian Industry Group managed to post a reading of 48.0 in April 2015, compared to last reading of 46.3.

• Japanese National Consumer Price Index released by the Statistics Bureau registered an increase of 2.3% in March 2015, compared to the last rise of 2.2%.

• Japanese National CPI Ex Food, Energy increased by 2.2% in March 2015, compared to March 2014.

• Japanese Unemployment Rate which comes from the Ministry of Health, Labor and welfare and published by the Japan Statistics Bureau posted a rate of 3.4% in March 2015.

• Japanese Securities investment, released by Ministry of Finance representing bonds issued in a domestic market by a foreign entity in the domestic market’s currency and detailing the flows from the public sector excluding Bank of Japan came in at ¥185.3B, compared to the last ¥432B.Japanese Foreign investment in Japan stocks i.e. the net data shows the difference of capital inflow and outflow was also published, which was at ¥821.0B, compared to the last reading of ¥595.2B.

USDJPY

The US Dollar was one of the worst performers recently, but only after the Japanese Yen. The USDJPY pair traded higher recently after finding buyers around the 118.40 support area. There were a couple of bearish trend lines formed on the 4-hour chart of the USDJPY pair, which were breached to open the doors for more gains in the near term. Moreover, the pair is now well placed above the 100 and 200 simple moving average, which is a bullish sign in the near term and might encourage buyers.

Intraday Support Level – 119.20

Intraday Resistance Level – 120.20

• Overall, as long as the pair is above the 100 SMA (4H) it might continue moving higher.

• A break below the same could ignite more losses in the short term.

On the upside, a break above the 120.20 level could take the USDJPY pair towards 120.80.

EURJPY

The Euro performed well recently not only against the US dollar, but also against the Japanese Yen. The EURJPY pair tested the 134.00-30 resistance area, and looks set for more upsides in the short term. There is a bullish trend line on the downside sitting around the 200 simple moving average on the 4 hour chart. If the pair corrects lower from the current levels, then initial support can be seen around the 38.2% fib retracement level of the last leg from the 127.85 low to 134.31 high.

Intraday Support Level – 132.50

Intraday Resistance Level – 134.30

• Buying dips around the 38.2% fib level looks like a good option.

• A break below the same might call for losses in the short term.

If EURJPY pair continues to move higher, then a break above 134.30 could take it towards 135.00.

More Technical Analysis