Yen strengthened against USD in recent days, led by weaker USD following a more accommodative that awaited FOMC meeting minutes and flight to safety flow due to the decline in world stocks. Because of this decline, prices have since lost nearly 300 pips higher from last Friday's 104.15.
It would be easy to simply state that the downtrend is in play, short USD / JPY and call it a day. But it should be noted that USD / JPY downtrend is not really the strongest nor the most convincing despite the bearish factors mentioned above. There seems to be some fight left in the bulls that can be seen from the fact that prices were mainly supported above 101.5 despite a lack of action by BOJ stimulus earlier this week. economic data such as machinery orders from Japan were lower than expected, and that should have resulted in stronger JPY as the market gave USD / JPY a huge premium and the premise that BOJ will be able to revive the economy. As more evidence against the effectiveness of the BOJ stimulus continue to pile up, the market will be disappointed by the central bank and doubt their ability to sustain a weakened Yen level.
Speaking of the effectiveness of the stimulus, a member of the board of the policy said it is possible that the weak Yen is having a greater impact on inflation pushing up than previously thought. Council members also agreed that the increase in sales hike will not affect consumer spending, while labor markets and wages improve if these opinions are valid or mere illusions remain to be seen, but clearly the BOJ members are comfortable and can even rejoice current stimulus. As such, we should not expect more stimulus from the BOJ in the immediate future, another reason for the market to be disappointed yet most bearish factors for USD / JPY.
Time Table
Therefore, the fact that prices remained supported above 101.5 and even pushed higher today after the minutes were released suggest that the upward force should not be easily dismissed. Considering that the current price has exceeded the corner down from above, from 102.0 to 102.15 is bullish target short-term reasonable. However, in light of all long-term bearish factors, it is difficult to see USD / JPY continue to climb higher, increasing the likelihood of a bear bouncing around the level mentioned above. stochastic indicator is in agreement that the curve Stoch is already in the overbought region, favoring the down cycles going forward.
Table Daily
daily Table shows the important support level at 101.2, and that may be a reasonable downside target for the short-term dynamic current. However, given that the market is really not disappointed by either BOJ, we should be able to expect bullish rebound off level instead of 101.2 escape. Again, the stochastic indicator is in agreement that the indicator is at the most oversold level since August 2013. If 101.2 does not break, we could see a strong downward decline as it is likely that market confidence in the BOJ will completely disappeared when this happens. From a technical perspective, the uptrend that has been in play since October 2013 will be invalidated, the opening of a return movement towards 97.0
Links :.
USD / JPY - Yen Rally continues despite Strong Claims US unemployment
S & P 500 - Maj major potential in the sense Vu
GBP / USD - slightly below book as US Unemployment Claims Dip
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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Read More : USD/JPY – Finding S/T Support Around 101.5
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