US Dollar - Japanese Yen (USD/JPY)
US Dollar-Japanese Yen (USD/JPY) Analysis
(Please refer daily currency charts and not short-term charts e.g. hourly charts. All technical analysis indicators for the weekly USD/JPY outlook are based on the daily forex charts and in some cases 4-hourly charts. The trading strategies and forecast is based on the technical and fundamental outlook.)
USD/JPY Weekly Forecast
Previous Outlook of USD/JPY:
" On one side the break below last to last week's 79.27 and also the attempt to break below the 55-day EAM support make the short-term outlook bearish but on the other hand the strong support near 50% retracement of the upward move during September 28 and November 2nd argues against the bearish outlook. On the upside we expect resistance near 79.90 i.e. below the psychological level of 80.00. A break over 80.00 will be required to turn the focus again for any upward gains toward 80.40/80.45 or even a retest of 80.67.”
USD/JPY Outlook For This Week:Please check the relative strengths of recent economic releases and technical indications at following links as the base of this week's forecast of USD/JPY. We recommend to check the economic strength meter on Fundamental Outlook page.USD/JPY Fundamental OutlookUSD/JPY Technical Outlook
US Dollar - Japanese Yen (USD/JPY) did something which we could not witness for quite some time. The pair showed a volatility of 225 pips during last week. After dropping to 79.21, USD/JPY had a very strong upward jump to 81.46 before entering into a sideways mode and closing for the week at 81.30.
Some of the points to note about the recent moves:
1) The support came at 200-day moving average. Please check this daily chart of USD/JPY.
2) The current resistance is coming at 61.8% retracement level of the downward move during March 15th and September 13th.
On one hand the strong upward move and a break over 80.67, which we had mentioned during the last weekend and quoted above, indicates that we can expect further upward moves, but on the other hand the point number 2 above will keep us neutral initially. Some of the poor economic data from U.S. also supports this outlook. We can even see some downward consolidation towards the support zone of 80.20/80.40. On the downside 80.00 should act as psychological support now and we expect a support in the range of 80.20/80.40.
On the upside, a decisive break over 81.46 and then 81.78 will represent a break of the above mentioned 61.8% retracement and also the resistance faced during mid-April. Such a move should bring further gains first towards the resistance zone of 82.80 to 81.30 (derived from the price action during April). Any decisive break over this should take USD/JPY to retest the high of March 14th i.e. 84.18. This level will also bring the psychological resistance of approaching 85.00 level.
On the downside, as mentioned above, we expect good support in the range of 80.20/80.40. Even if this support is broken, we will expect a very strong support near 79.90. Any decisive break below this will neutralize our above mentioned outlook and that should bring further deeper moves, first towards the 55-day EMA support near 79.40 and then possibly more.
Please note that we will be taking any upward gains just as consolidations till any decisive break of 85.51 (the high of April 2011) does not take place. Our overall outlook remains bearish.
The currency correlation of EUR/JPY became unexpectedly high at 0.99 during last week.
USD/JPY Trading Strategies:
As mentioned above, initially we stay neutral and will wait for the breaks of the immediate resistance of 61.80 retracement as mentioned above and then 81.78. With such break we will again go on the buying side to target the next resistance levels mentioned above. As we expect some downward consolidation first, we will look forward to take a long position near the mentioned support levels if the current resistance continues.
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