Overview: USD/JPY is consolidating with bullish bias after hitting a four-day high of 97.65 on Wednesday. It is supported by receding investor risk aversion (S&P gained 0.06% overnight) after White House announced that Janet Yellen would be nominated to lead the Federal Reserve, weighing on the yen as her support for continued central bank stimulus will help riskier assets and hurt safe havens. The USD/JPY is also supported by demand from Japan importers, improved dollar sentiment (ICE spot dollar index last 80.35 versus 80.01 early Wednesday) after minutes of the September FOMC revealed that the decision not to begin tapering stimulus was a “close call,” and most Fed officials still expected to start winding down asset purchases before the end of 2013 and complete them by mid-2014; higher U.S. Treasury yields. But the USD/JPY gains are tempered by Japan exporter sales, concerns that the political impasse in Washington could continue past the deadline to raise the debt ceiling later this month.
Technical outlook: Daily chart is mixed as MACD is bearish, but stochastics turned bullish in oversold area.
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 98.05 and the second target at 98.25. In alternative scenario, if the price moves below its pivot points short positions are recommended with the first target at 97.2, the breach of this target will move the pair further downwards and one may expect the second target at 96.95. The pivot point stands at 97.4.
Resistance levels: 98.05 98.25 98.5
Support levels: 97.2 96.95 96.5
The material has been provided by InstaForex Company – www.instaforex.com
Overview:
USD/JPY is consolidating with bullish bias after hitting a four-day high of 97.65 on Wednesday. It is supported by receding investor risk aversion (S&P gained 0.06% overnight) after White House announced that Janet Yellen would be nominated to lead the Federal Reserve, weighing on the yen as her support for continued central bank stimulus will help riskier assets and hurt safe havens. The USD/JPY is also supported by demand from Japan importers, improved dollar sentiment (ICE spot dollar index last 80.35 versus 80.01 early Wednesday) after minutes of the September FOMC revealed that the decision not to begin tapering stimulus was a “close call,” and most Fed officials still expected to start winding down asset purchases before the end of 2013 and complete them by mid-2014; higher U.S. Treasury yields. But the USD/JPY gains are tempered by Japan exporter sales, concerns that the political impasse in Washington could continue past the deadline to raise the debt ceiling later this month.
Technical outlook:
Daily chart is mixed as MACD is bearish, but stochastics turned bullish in oversold area.
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 98.05 and the second target at 98.25. In alternative scenario, if the price moves below its pivot points short positions are recommended with the first target at 97.2, the breach of this target will move the pair further downwards and one may expect the second target at 96.95. The pivot point stands at 97.4.
Resistance levels:
98.05
98.25
98.5
Support levels:
97.2
96.95
96.5
The material has been provided by InstaForex Company – www.instaforex.com
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