USD / JPY Trading Outlook
USD/JPY is ranging between 77.80-77.95 and they are the nearest support and resistance levels for now. The pair is showing a lack of momentum and could go either way today, however moves should be limited as there is only the Core CPI being announced and this is expected to stay constant at 0.1% for the month and 2.1% for the year. EUR/USD failed to break Y101.00 and hence didn’t reach the all time low of 100.75 however this is still a target even after a strong rally up yesterday of 150pips!
USD/JPY pair couldn’t break 78.10/15 and bounced down in a nice channel to 77.90 which is the current support before 77.65. Resistance is now at 78.00 before 78.15 however the downward trend is support by fundamentals of a relatively weakening dollar this morning (dollar index down from 80.538 to 80.502) and Japanese data came out weak but the currency has maintained strength. Both Tankan surveys came out lower than expected. EUR/JPY is heading to all time lows (100.75 achieved Oct-3rd) showing the incredible weakness of the EUR, however it is in oversold levels at the moment and you may want to wait for it to settle before trading.
USD/JPY was lifted in yesterdays trading on USD strengh and is now consolidated from 77.90 to 78.05. The pair has pulled back on its support and there is a preference to buy at 77.80 as long as the level holds with 78.10 as the initial resistance.
USD/JPY having broken free of last weeks channel it tested Y78.00 but the high levels struggled to hold as it came down twice to try and get back its downtrend from last week. However the mood was not negative enough to hold and we have clearcut support at Y77.70 and resistance at Y77.90/95. USD/JPY is about the only FOREX pairing unaffected by the EU crisis at the moment since both currencies are seen as strong safe havens and there is little news coming from either country to suggest major changes in their economic outlooks.
USD/JPY broke free of its downward channel from last week during London Opening hours this morning. It is testing the Y77.90 mark and if it breaks then last weeks high of Y78.10 is next in line before Y78.30.
The channel itself provides the support and a drop down to Y77.70 could signify a continuation of last week’s downtrend. Stocks rose by 1.37% in the Nikkei amid general Asain bullishness, tempered only by some weak figures in China. In the longer term, the pair has created a bearish diamond on the daily chart and this could indicate a push to record lows before, or unless there is, Band of Japan intervention.
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