Analytical Review of the Currency Pair USD/JPY

Analytical Review of the Currency Pair USD/JPY

5 April 2016, 14:19
Roberto Jacobs
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Analytical Review of the Currency Pair USD/JPY

Technical data of the currency pair:

Previous closing: 111.34;
Daily range: 110.45-111.36;
Opening: 111.34;
52- week range: 110.45-125.86;
Annual revenue: -6.73%;
Change in % for the previous day: -0.41.

Analytical review:

  • Since the beginning of April the Yen has significantly strengthened against the USD (over 250 points). During yesterday’s trading session the currency has grown by 0.41%.
  • Demand for the Japanese currency is supported by the positive Chinese economic statistics released last week. It became known that business activity index in the manufacturing sector of China rose to 50.2 points, against the forecast of 49.3 points.
  • According to United States Bureau of Census volume of production orders fell by 1.7% in February, while in January the index rose by 1.2%.
  • Commitments of Traders” shows ambiguous picture. Large speculators have increased long positions by 305 contracts. Short positions have been increased by 3149 contracts.
  • This week, minutes of FOMC meeting will be released (on Friday). It may have effect on the currency pair and market volatility.


Summary:

  • Poor US macro-economic data, increased economic expectations in Japan, high volatility in the financial market put pressure on the currency pair.
  • According to “COT” large speculators do not have common opinion about the Yen.
  • It is expected that the Yen will rise against the USD in the near future. We recommend to open short positions.


Trading tips for the currency pair USD/JPY

Medium-term trading: at the moment the currency has broken down the local support level of 110.70. If the pair maintains and tests the zone of 110.70-111.00 and in case of the respective confirmation (such as Price Action pattern), we recommend to open short positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 110.20, 109.60 and 109.10 with the use of trailing stops.


s0504USDJPYH4


Short-term trading: on the chart with the timeframe 15M the Yen consolidated below the local support level of 110.80. If the pair maintains and tests the zone of 110.60-110.80, we recommend to open short positions. Risk per trade is not more than 3% of the capital. Take profit can be placed in parts at the levels of 110.25, 109.90 and 109.60 with the use of trailing stops.


k0504USDJPYM15.png


The material has been provided by LiteForex - Finance Services Company - www.liteforex.com


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