Overview: USD/JPY is trading with bullish bias. The USD/JPY pair is underpinned by stronger dollar sentiment (ICE spot dollar index last 81.37 versus 80.92 early Wednesday) and higher U.S. Treasury yields after minutes from Federal Reserve’s July policy meeting indicated policy makers broadly support tapering this year but no clarity on exactly when the taper will begin. “Because the tone of the minutes do not meaningfully reduce risks of a September taper, they will likely be seen as marginally positive for the dollar, and negative for bonds and stocks,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. USD/JPY is also supported by demand from Japan importers and investment trusts; stronger-than-expected 6.5% increase in U.S. July existing home sales to 5.39 million (versus 5.15 million forecast). But USD/JPY gains are tempered by Japan exporter sales; flows to haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 6.91% to 15.94, S&P fell 0.58% overnight) on uncertainty over Fed’s tapering schedule and concerns over countries in emerging markets that would be adversely affected by reduced global liquidity after the Fed scales down its quantitative easing. Daily chart is positive-biased as MACD and stochastics are turning bullish.
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, trading in higher range is most favorable and buy position is recommended above its pivot, with the first target at 98.8 and the second target at 99.1. You should keep in view short position below the pivot keep of the first target at 97.75, breach of this target will move the pair downward further and one may expect the second target at 97.5. The pivot point stands at 97.95.
Resistance Levels: R1 – 98.8 R2 – 99.1 R3 – 99.45
Support Levels: S1 – 97.75 S2 – 97.5 S3 – 97
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
USD/JPY is trading with bullish bias. The USD/JPY pair is underpinned by stronger dollar sentiment (ICE spot dollar index last 81.37 versus 80.92 early Wednesday) and higher U.S. Treasury yields after minutes from Federal Reserve’s July policy meeting indicated policy makers broadly support tapering this year but no clarity on exactly when the taper will begin. “Because the tone of the minutes do not meaningfully reduce risks of a September taper, they will likely be seen as marginally positive for the dollar, and negative for bonds and stocks,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. USD/JPY is also supported by demand from Japan importers and investment trusts; stronger-than-expected 6.5% increase in U.S. July existing home sales to 5.39 million (versus 5.15 million forecast). But USD/JPY gains are tempered by Japan exporter sales; flows to haven JPY and unwinding of JPY-funded carry trades amid increased risk aversion (VIX fear gauge rose 6.91% to 15.94, S&P fell 0.58% overnight) on uncertainty over Fed’s tapering schedule and concerns over countries in emerging markets that would be adversely affected by reduced global liquidity after the Fed scales down its quantitative easing. Daily chart is positive-biased as MACD and stochastics are turning bullish.
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, trading in higher range is most favorable and buy position is recommended above its pivot, with the first target at 98.8 and the second target at 99.1. You should keep in view short position below the pivot keep of the first target at 97.75, breach of this target will move the pair downward further and one may expect the second target at 97.5. The pivot point stands at 97.95.
Resistance Levels:
R1 – 98.8
R2 – 99.1
R3 – 99.45
Support Levels:
S1 – 97.75
S2 – 97.5
S3 – 97
The material has been provided by InstaForex Company – www.instaforex.com
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