Overview: USD/JPY is to consolidate with bullish bias after hitting six-month high 103.13 Monday. Underpinned by positive dollar sentiment (ICE spot dollar index last 80.90 versus 80.64 early Monday) after U.S. ISM manufacturing PMI unexpectedly increased to 57.3 in November – the highest since April 2011 from 56.4 in October (defying forecast for drop to 55.2). U.S. Markit final November manufacturing PMI came in at 10-month high of 54.7 (versus 54.3 flash reading), stronger-than-expected 0.8% rise in U.S. October construction spending (versus forecast +0.4%). USD/JPY also supported by higher U.S. Treasury yields; weak yen sentiment amid expectations that the Bank of Japan will take further easing steps if Japan’s economic growth and ambition to reach 2% inflation by the end of March 2016 are threatened by the planned sales tax hike to 8% next April; demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales; reduced risk appetite (VIX fear gauge rose 3.87% to 14.23, S&P eased 0.27% overnight) as positive U.S. data add to bets that the Federal Reserve might start reducing its monetary stimulus soon.
Technical comment: Daily chart positive-biased as MACD bullish, stochastics stays elevated at overbought; 5- & 15-day moving averages advancing.
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 103.7 and the second target at 104. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.2. The breach of this target will move the pair further downwards and one may expect the second target at 101.9. The pivot point stands at 102.6.
Resistance levels: 13.7 104 104.35 Support levels: 102.2 101.9 101.6
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
USD/JPY is to consolidate with bullish bias after hitting six-month high 103.13 Monday. Underpinned by positive dollar sentiment (ICE spot dollar index last 80.90 versus 80.64 early Monday) after U.S. ISM manufacturing PMI unexpectedly increased to 57.3 in November – the highest since April 2011 from 56.4 in October (defying forecast for drop to 55.2). U.S. Markit final November manufacturing PMI came in at 10-month high of 54.7 (versus 54.3 flash reading), stronger-than-expected 0.8% rise in U.S. October construction spending (versus forecast +0.4%). USD/JPY also supported by higher U.S. Treasury yields; weak yen sentiment amid expectations that the Bank of Japan will take further easing steps if Japan’s economic growth and ambition to reach 2% inflation by the end of March 2016 are threatened by the planned sales tax hike to 8% next April; demand from Japan importers and investment trusts. But USD/JPY gains tempered by Japan exporter sales; reduced risk appetite (VIX fear gauge rose 3.87% to 14.23, S&P eased 0.27% overnight) as positive U.S. data add to bets that the Federal Reserve might start reducing its monetary stimulus soon.
Technical comment:
Daily chart positive-biased as MACD bullish, stochastics stays elevated at overbought; 5- & 15-day moving averages advancing.
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 103.7 and the second target at 104. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 102.2. The breach of this target will move the pair further downwards and one may expect the second target at 101.9. The pivot point stands at 102.6.
Resistance levels:
13.7
104
104.35
Support levels:
102.2
101.9
101.6
The material has been provided by InstaForex Company – www.instaforex.com
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