USDJPY, H1 and H4
The dollar is trading firmer against most of its main peers, while the yen has underperformed. USDJPY has led the way, with the pair having recouped above 110.00 from yesterday’s low at 108.26. Yen crosses are also higher, with EURJPY rallying to a 19-month high today, for instance. Trump’s measured response to North Korea’s launch of a missile over Japan (he refrained from “fire and fury” bombast and instead said that “all options are on the table”) helped allay heightened fears that Pyongyang’s latest antics sparked, which led to some pivoting out of safe haven assets and currencies. A stronger than expected reading in U.S. consumer confidence yesterday also gave the dollar a lift, although the data is a pre-Harvey snapshot.
Therefore I retain a bearish view on yen, as per my yesterday report on GBPJPY as well. Yesterday’s report hit both hourly targets, with net gain of +36 pips. Today however a Long position was taken on USDJPY based on the break of 110.00, with an entry at 109.96. Important is the fact that in a Daily timeframe, the cross helds a strong support for the last 8 consecutive days , at 108.10, therefore in a big picture, only a break below that level will possible takes pair to year’s low again.
As per today’s trade, the entry was taken after the new Higher Up fractal formed in the hourly chart. Meanwhile in the 4-hour chart, the cross manage to break the 20 period and 50 period SMA which had a clash at 109.30. This level was set as the support level for the two entries taken, i.e. on in the H1 chart and one on the H4 chart. The hourly target was set at 110.30, while the 4-hour target was set at 110.60. In the 4-hour chart, the RSI is at 61, while MACD turned positive.
Nevertheless, if the pair manage to hit 110.60 level and consequently, to break with this way the 50 DAY EMA and the Downtrend Channel set since July 7 peak, then this might indicates a possible reversal of the trend to the upwards, up to 111.50 level.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.