Overview: USD/JPY is trading in a lower range. It is undermined by flows to the safe-haven JPY and unwinding of JPY-funded carry trades as investor risk appetite crimped (S&P fell 0.47% overnight) amid concerns about China’s monetary policy and banking system liquidity, and the euro-zone bank stress tests. USD/JPY fell one yen to the two-week low of 97.15 Wednesday after China’s central bank held back from liquidity operations and the seven-day repo rate spiked above 4%; reports that the biggest Chinese banks had written off triple the amount of bad loans in the first half of 2013 as they cleaned up their books ahead of a potential wave of defaults. USD/JPY also weighed by Japan exporter sales; expectations that the Federal Reserve will continue its current pace of bond-buying well into 2014. But USD/JPY losses are tempered by demand from Japan importers. Yen crosses are vulnerable to 0145 GMT October HSBC China flash manufacturing PMI data.
Technical Comment: Daily chart is negative-biased as MACD is in bearish mode; stochastics is turning bearish; bearish parabolic stop-and-reverse signal hit Wednesday.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 97 in view; a breach of this target will move the pair further downwards to 96.8. The pivot point stands at 97.55. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 97.8 and the second target at 98.2.
Support levels:
97 96.8 96.5
Resistance levels: 97.8 98.2 98.5
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
USD/JPY is trading in a lower range. It is undermined by flows to the safe-haven JPY and unwinding of JPY-funded carry trades as investor risk appetite crimped (S&P fell 0.47% overnight) amid concerns about China’s monetary policy and banking system liquidity, and the euro-zone bank stress tests. USD/JPY fell one yen to the two-week low of 97.15 Wednesday after China’s central bank held back from liquidity operations and the seven-day repo rate spiked above 4%; reports that the biggest Chinese banks had written off triple the amount of bad loans in the first half of 2013 as they cleaned up their books ahead of a potential wave of defaults. USD/JPY also weighed by Japan exporter sales; expectations that the Federal Reserve will continue its current pace of bond-buying well into 2014. But USD/JPY losses are tempered by demand from Japan importers. Yen crosses are vulnerable to 0145 GMT October HSBC China flash manufacturing PMI data.
Technical Comment:
Daily chart is negative-biased as MACD is in bearish mode; stochastics is turning bearish; bearish parabolic stop-and-reverse signal hit Wednesday.
Trading recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. A short position is recommended with the first target at 97 in view; a breach of this target will move the pair further downwards to 96.8. The pivot point stands at 97.55. In case the price moves in the opposite direction, bounces back from support, and moves above its pivot point, the price is most favorably expected to move further to the upside. In that scenario a long position is recommended with the first target at 97.8 and the second target at 98.2.
Support levels:
97
96.8
96.5
Resistance levels:
97.8
98.2
98.5
The material has been provided by InstaForex Company – www.instaforex.com
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