Overview: USD/JPY is trading in lower range. The rate is undermined by flows to safe-haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 4.51% to 23.57, S&P fell 0.59% Friday) as uncertainty mounted ahead of U.S. Federal Reserve’s monetary policy decision on Wednesday; negative dollar sentiment after International Monetary Fund cut its U.S. economic growth outlook for next year to 2.7% from the 3% projected in April, U.S. May industrial production growth came in flat (vs +0.1% forecast) and University of Michigan preliminary Consumer Sentiment Index dipped to 82.7 in early June (vs 84.0 forecast) from 84.5 at end of May. USD/JPY is also weighed by narrowing USD-JPY interest rate differential; Japan exporter sales; concerns that Japan may not be able to follow through on promises of aggressive monetary easing. USD/JPY vulnerable to movements in Japan’s Nikkei–further losses in Japanese stocks would weigh on USD/JPY as non-Japanese funds would have to adjust their portfolio hedge. But USD/JPY losses are tempered by demand from Japan importers. Daily chart is negative-biased as MACD and stochastics are bearish, although latter is at oversold; five- and 15-day moving averages are declining.
Trading recommendation:
The pair is trading below its pivot point. The pair is likely to trade in lower range as far as it remains below its pivot point. Short position is recommended with the first target at 94.35 in view, breach of this target will move the pair further downward and you should expect the second target at 93.75. Pivot point stands at 95.3. In case the price moves in opposite direction and returns from its support and moves above its pivot point, trading in higher range is the most favorable and buy position is recommended above its pivot with the first target at 95.85 and the second target at 96.5.
Overview:
USD/JPY is trading in lower range. The rate is undermined by flows to safe-haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 4.51% to 23.57, S&P fell 0.59% Friday) as uncertainty mounted ahead of U.S. Federal Reserve’s monetary policy decision on Wednesday; negative dollar sentiment after International Monetary Fund cut its U.S. economic growth outlook for next year to 2.7% from the 3% projected in April, U.S. May industrial production growth came in flat (vs +0.1% forecast) and University of Michigan preliminary Consumer Sentiment Index dipped to 82.7 in early June (vs 84.0 forecast) from 84.5 at end of May. USD/JPY is also weighed by narrowing USD-JPY interest rate differential; Japan exporter sales; concerns that Japan may not be able to follow through on promises of aggressive monetary easing. USD/JPY vulnerable to movements in Japan’s Nikkei–further losses in Japanese stocks would weigh on USD/JPY as non-Japanese funds would have to adjust their portfolio hedge. But USD/JPY losses are tempered by demand from Japan importers. Daily chart is negative-biased as MACD and stochastics are bearish, although latter is at oversold; five- and 15-day moving averages are declining.
Trading recommendation:
The pair is trading below its pivot point. The pair is likely to trade in lower range as far as it remains below its pivot point. Short position is recommended with the first target at 94.35 in view, breach of this target will move the pair further downward and you should expect the second target at 93.75. Pivot point stands at 95.3. In case the price moves in opposite direction and returns from its support and moves above its pivot point, trading in higher range is the most favorable and buy position is recommended above its pivot with the first target at 95.85 and the second target at 96.5.
Support levels:
S1 – 94.35
S2 – 93.75
S3 – 93.5
Resistance levels:
R1 – 95.85
R2 – 96.5
R3 – 96.85
The material has been provided by InstaForex Company – www.instaforex.com
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