Technical analysis of USD/JPY for February 18, 2014

Japan’s
economy grew just 0.3% in the fourth quarter, well below the median estimate
of a 0.7% increase and followed a 0.3% growth in July-Sept. The disappointing
result will keep pressure on the Bank of Japan to support the economy once an
increase in the sales tax takes place in April. In the technical front, USD/JPY gave a nice breakout in the daily and hourly charts. In Asia’s
trading session, the pair is trading at the level of 102.07. Yesterday, in our USDX
daily report, we discussed that USD pairs had attractive trade setup near
crucial support zone. We recommend buying on USDX and USD/SGD. USD/JPY after making a double top in the daily chart
at the level 102.7, went through a healthy correction. In yesterday’s trade the
pair made a double bottom in the hourly chart at the level of 101.39. After a good
consolidation, the pair today gave a fresh break. In the hourly chart RSI looks
positive, and the price is trading above the 21 and 40 DEMA. Right now can we can see overbought signs in
the hourly chart, so some pullback is expected before further upmove.

Intraday recommendation- buy for targets of 102.7

Support: 101.88, 101.6, 101.0.

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