Short term
Trade view / 28 November 2014 at 0:26 GMT

Awaiting USDJPY rally to new highs for the year

Managing Director / Technical Research Limited
New Zealand
Instrument: USDJPY
Price target:
Market price:
Background

The USDJPY has been trading sideways over the last couple of days but Japanese Consumer Price Index data for October may prompt a break out. With inflation tracking at an annual rate that is only half the Bank of Japan’s target, expectations of even more easing will arise if today’s CPI number drops further. Earlier on, an auction of two-year government bonds is likely to produce a yield of around zero, if not negative.

There is no economic data out of the US today that will impact on this cross. Meanwhile the JPY has recently hit a 30 year low. My analysis of that situation is shown here

Management and risk description

The US dollar completed its requisite corrective structure on yesterday’s low about 117.25 in my targeted support, and whilst it is now holding at 117.50/117.25, I am looking for a rally back toward the 118.95 level (this month’s high), en route to 120.60 over the coming days.

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Parameters

Entry: Buying USDJPY today at about the 117.65 level

Stop: 117.20 initially

Target: 50% at 119.30 and 50% at 120.40

Time horizon: Allow several days for both targets to be met


USDJPY daily chart (click to expand)

USDJPY daily chart

















 Source: ThomsonReuters


— Edited by Robert Ryan

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Disclaimer:
Non-independent investment research
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