Overview: USD/JPY is in range-trade. The rate is supported by renewed speculation that U.S. Federal Reserve might wind down its quantitative easing measures after Fed’s John Williams said he is open to tapering the central bank’s bond-buying program in coming months if the economy continues to improve, suggesting the Fed could begin trimming its $85 billion-a-month bond purchases by summer. USD/JPY also buoyed by demand from Japan importers and investment trusts; weak yen sentiment on Bank of Japan’s aggressive easing measures to help reach its 2% inflation target; report showing Japanese investors were net buyers of Y186.48 billion worth of foreign bonds and Y19.28 billion of foreign stocks in the week ended May 11, suggesting they were moving money out of the country following the BOJ’s drastic increase in its bond-purchasing program. But dollar sentiment dented by soft U.S. economic data: U.S. CPI fell by more-than-expected 0.4% in April (vs minus 0.3% forecast), U.S. housing starts declined bigger-than-expected 16.5% in April (vs minus 6.4% forecast), latest U.S. weekly jobless claims unexpectedly jumped by 32,000 to 360,000 (vs 330,000 forecast), Philadelphia Federal Reserve’s index of business conditions unexpectedly fell to minus 5.2 in May from plus 1.3 in April (vs forecast for rise to +2.0). USD/JPY upside also limited by Japan exporter sales; positions adjustment before weekend. Daily chart is mixed as MACD is bullish, 5- and 15-day moving averages are rising; but stochastics is bearish at overbought.
Trading recommendations: The pair is trading above its pivot point. It is likely to trade in higher range as far as it remains above its pivot point. As far as the price is above its pivot point, trading in higher range is most favorable and buy position is recommended above its pivot with the first target at 103.05 and the second target at 103.3. You should keep in view short position below the pivot keep of the first target at 101.25, breach of this target will move the pair downward further and expect the second target at 100.85. The pivot point stands at 101.95.
Overview:
USD/JPY is in range-trade. The rate is supported by renewed speculation that U.S. Federal Reserve might wind down its quantitative easing measures after Fed’s John Williams said he is open to tapering the central bank’s bond-buying program in coming months if the economy continues to improve, suggesting the Fed could begin trimming its $85 billion-a-month bond purchases by summer. USD/JPY also buoyed by demand from Japan importers and investment trusts; weak yen sentiment on Bank of Japan’s aggressive easing measures to help reach its 2% inflation target; report showing Japanese investors were net buyers of Y186.48 billion worth of foreign bonds and Y19.28 billion of foreign stocks in the week ended May 11, suggesting they were moving money out of the country following the BOJ’s drastic increase in its bond-purchasing program. But dollar sentiment dented by soft U.S. economic data: U.S. CPI fell by more-than-expected 0.4% in April (vs minus 0.3% forecast), U.S. housing starts declined bigger-than-expected 16.5% in April (vs minus 6.4% forecast), latest U.S. weekly jobless claims unexpectedly jumped by 32,000 to 360,000 (vs 330,000 forecast), Philadelphia Federal Reserve’s index of business conditions unexpectedly fell to minus 5.2 in May from plus 1.3 in April (vs forecast for rise to +2.0). USD/JPY upside also limited by Japan exporter sales; positions adjustment before weekend. Daily chart is mixed as MACD is bullish, 5- and 15-day moving averages are rising; but stochastics is bearish at overbought.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in higher range as far as it remains above its pivot point. As far as the price is above its pivot point, trading in higher range is most favorable and buy position is recommended above its pivot with the first target at 103.05 and the second target at 103.3. You should keep in view short position below the pivot keep of the first target at 101.25, breach of this target will move the pair downward further and expect the second target at 100.85. The pivot point stands at 101.95.
Resistance levels:
R1 – 103.06 (Oct. 14, 2008 reaction high)
R2 – 103.3
R3 – 103.75
Support levels:
S1 – 101.25 (Tuesday’s low)
S2 – 100.85
S3 – 100.54 (May 10 low)
The material has been provided by InstaForex Company – www.instaforex.com
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