Technical Analysis USDJPY : 2014-03-19

Good afternoon, dear traders. Today at 20:30 (CET), we will see the U.S. Federal Reserve official report (FOMC Statement). Investors will expect new signals regarding to the monetary policy regulator and possible changes in interest rates. We do not foresee any major changes since the U.S. economy is steadily recovering from the recession of 2008 so there is no significant controller interference required. Nevertheless, it is difficult to describe the report impact on the emotional market trends in advance, so we will focus on technical analysis today.

We keep monitoring the USD/JPY on the H4 chart. The price drifts near weekly support line which is the most significant one. In this regard, we would expect breaking the H4 trend line upwards, especially since the price has already crossed the Pivot signal line under the bullish influence. As the ParabolicSAR moves along the H4 trend line, we can expect signal to change the trend direction during the intersection of H4 Parabolic. We should wait for a preliminary breakthrough at 44.860 by the RSI-Bars leading indicator.

We choose a target being based on traditional strategy by fixing the next historical maximum below the 161.8 % Fibonacci level. At the moment, it corresponds to 101.972. The recommended stop loss is to be placed at the nearest support (101.287) and moved after the ParabolicSAR, as soon as it crosses the preliminary stop level. The order is recommended to be open 15 minutes prior to the FED report publication. We believe that the position should be closed immediately in case of crossing the support level at 101.287 downwards by the price before the order triggers. This would mean that the weekly trend has reversed and the market experiences fundamental changes that have not been taken into account.

P.S. The current author’s position, opened on Monday, is shown by dashed lines.

Position openingabove 101.778
targetbelow 101.972
Preliminary stopbelow 101.287


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