Overview: USD/JPY is trading with risks skewed lower. It is undermined by selling of yen crosses and flows to safe-haven JPY amid heightened investor risk aversion (VIX fear gauge rose 4.79% to 20.34, S&P tumbled 1.23% overnight) as the budget impasse in Washington drags on for the ninth day, raising jitters over the possibility that the federal debt ceiling will be breached and the Treasury will default on government debt (one-month U.S. Treasury bill yield rose to 0.322%, above one-month U.S. interbank lending rate of 0.174%, suggesting investors think banks are more credit-worthy than government in the short term). USD/JPY is also weighed by reduced expectations that the Fed would start to taper its $85 billion-a-month bond-buying program this year due to economic impact and big data gap from government shutdown, Japan exporter sales. But USD/JPY losses are tempered by demand from Japan importers, a surprising 63.7% fall in Japan current account surplus to Y161.5 billion in August (versus Y540 billion forecast) from Y577.3 billion in July.
Technical Oulook: Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed in oversold zone; the five- and 15-day moving averages are declining.
Trading recommendations: The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 97.5 and the second target at 97.85. In alternative scenario, if the price moves below its pivot points short positions are recommended with the first target at 96.75, the breach of this target will move the pair further downwards and one may expect the second target at 96.5. The pivot point stands at 96.95.
Resistance levels: 97.5 97.85 98.15
Support levels: 96.75 96.5 96
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
USD/JPY is trading with risks skewed lower. It is undermined by selling of yen crosses and flows to safe-haven JPY amid heightened investor risk aversion (VIX fear gauge rose 4.79% to 20.34, S&P tumbled 1.23% overnight) as the budget impasse in Washington drags on for the ninth day, raising jitters over the possibility that the federal debt ceiling will be breached and the Treasury will default on government debt (one-month U.S. Treasury bill yield rose to 0.322%, above one-month U.S. interbank lending rate of 0.174%, suggesting investors think banks are more credit-worthy than government in the short term). USD/JPY is also weighed by reduced expectations that the Fed would start to taper its $85 billion-a-month bond-buying program this year due to economic impact and big data gap from government shutdown, Japan exporter sales. But USD/JPY losses are tempered by demand from Japan importers, a surprising 63.7% fall in Japan current account surplus to Y161.5 billion in August (versus Y540 billion forecast) from Y577.3 billion in July.
Technical Oulook:
Daily chart is negative-biased as MACD is bearish, stochastics stays suppressed in oversold zone; the five- and 15-day moving averages are declining.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 97.5 and the second target at 97.85. In alternative scenario, if the price moves below its pivot points short positions are recommended with the first target at 96.75, the breach of this target will move the pair further downwards and one may expect the second target at 96.5. The pivot point stands at 96.95.
Resistance levels:
97.5
97.85
98.15
Support levels:
96.75
96.5
96
The material has been provided by InstaForex Company – www.instaforex.com
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