OvervieW: USD/JPY is consolidating as caution prevails ahead of Federal Reserve’s monetary policy decision on Wednesday. Odds had increased that the Federal Reserve might start winding down its monthly $85 billion bond-buying program this week after recent upbeat U.S. data, but many still expect the Fed to start tapering in the first quarter of 2014. USD/JPY is supported by higher U.S. Treasury yields; bigger-than-expected 1.1% rise in U.S. November industrial production (versus forecast +0.6%); stronger-than-expected 3% growth in U.S. 3Q nonfarm productivity for fastest pace since the fourth quarter of 2009; JPY-funded carry trades amid positive investor risk appetite (S&P gained 0.63% overnight); demand from Japan importers; expectations that the Bank of Japan will expand monetary easing measures further to support economic growth and to reach its 2% inflation target by the end of March 2016. But USD sentiment dented by drop in Markit U.S. flash manufacturing PMI to 54.4 in December from 54.7 in November; weaker-than-expected rise in U.S. Empire State’s business conditions index to 0.98 in December from minus 2.2 in November, versus forecast 4.0). USD/JPY gains are also tempered by Japan exporter sales.
Technical comment: Daily chart is tilting negative as MACD and stochastics are turning bearish.
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 103.15 and the second target at 103.4. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.4. The breach of this target will move the pair further downwards and one may expect the second target at 102.15. The pivot point stands at 102.6.
Resistance levels: 103.15 103.4 103.65 Support levels: 102.4 102.15 101.9
The material has been provided by InstaForex Company – www.instaforex.com
OvervieW:
USD/JPY is consolidating as caution prevails ahead of Federal Reserve’s monetary policy decision on Wednesday. Odds had increased that the Federal Reserve might start winding down its monthly $85 billion bond-buying program this week after recent upbeat U.S. data, but many still expect the Fed to start tapering in the first quarter of 2014. USD/JPY is supported by higher U.S. Treasury yields; bigger-than-expected 1.1% rise in U.S. November industrial production (versus forecast +0.6%); stronger-than-expected 3% growth in U.S. 3Q nonfarm productivity for fastest pace since the fourth quarter of 2009; JPY-funded carry trades amid positive investor risk appetite (S&P gained 0.63% overnight); demand from Japan importers; expectations that the Bank of Japan will expand monetary easing measures further to support economic growth and to reach its 2% inflation target by the end of March 2016. But USD sentiment dented by drop in Markit U.S. flash manufacturing PMI to 54.4 in December from 54.7 in November; weaker-than-expected rise in U.S. Empire State’s business conditions index to 0.98 in December from minus 2.2 in November, versus forecast 4.0). USD/JPY gains are also tempered by Japan exporter sales.
Technical comment:
Daily chart is tilting negative as MACD and stochastics are turning bearish.
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 103.15 and the second target at 103.4. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.4. The breach of this target will move the pair further downwards and one may expect the second target at 102.15. The pivot point stands at 102.6.
Resistance levels:
103.15
103.4
103.65
Support levels:
102.4
102.15
101.9
The material has been provided by InstaForex Company – www.instaforex.com
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