Technical Analysis USDJPY : 2015-03-17


More than three months of yen consolidation

Today we would like to focus your attention to the USD/JPY currency pair on the daily chart. The formation of different triangles or consolidation stage has lasted for more than three months. We don’t rule out a noticeable movement in case of a next support or resistance line breakout. Note that during the yen strengthening, the US dollar index rose almost 13%. Since the early July 2014 the weakening of euro and yen against the dollar has been similar and amounted to 21%. Today as the BOJ meeting minutes revealed that the annual limit of yen issuing in the amount of 80 trillion yen ($659 billion) intended for purchasing Japanese government bonds and other assets was left unchanged. Today at 6:30 CET the BOJ Governor Haruhiko Kuroda will hold the press conference. We suppose he might speak in favor of the weaker yen. The FOMC press conference will take place tomorrow: the Fed Chair Janet Yellen might declare that strong dollar has a negative impact on the economy. The US dollar index hit the 12-year high, so we suggest a further US dollar pullback in this case and the corresponding yen rising or falling on the chart. In addition to the FOMC meeting, the Japanese Trade Balance in February will be released tomorrow. We deem that the tentative outlook is negative.

USD/JPY

The daily chart of the USD/JPY shows the consolidation stage shaped as a triangle, but the uptrend price channel is still remained. RSI-Bars oscillator also indicates the bullish market: it is located above 50. The moving average has a strong upward bias. In our opinion, the trend might be defined after the price leaves the “triangle”. Let the market choose the price direction. The most significant levels at 119.934 and 122.021 are confirmed by Bill Williams fractals, Parabolic points and Donchian Channel boundaries. Two positions can be placed at the opposite levels: after one of the orders is opened, the second one can be deleted. It means the market has chosen the direction. After pending order placing, Stop loss is to be moved every four hours near the next fractal high (short position) or low (long position), following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionSell
Sell stopbelow 119.934
Stop lossabove 122.021

PositionBuy
Buy stopabove 122.021
Stop lossbelow 119.934

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Note

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