FXWW News/JPY crosses/Technical Analysis/Trade Ideas/USD/JPY

USD/JPY should continue to drift lower but….

Plenty of conflicting forces at play in the Yen pairs which should ensure volatility, but not all in the same direction.

  • Rise in metal prices should stoke up some risk-aversion across financial markets which in turn is bearish for Yen crosses.
  • But, pairs like EUR/JPY and AUD/JPY are still looking technically constructive so no need to panic sell there.
  • The USD is falling out of favour again with tapering on the back burner, and with the market sitting long USD already we may see more profit taking ahead of the August holiday period.
  • But, yesterday’s election gave the Japanese PM a mandate to continue with expansionist monetary policy which will be Yen negative.

The strongest of these 4 factors in my mind is the pre-holiday positioning, so I’d expect to see a slow, sideways/lower drift over the coming weeks.

  1. I’m only guessing Mike but I do know that my tendency was to be long and I’m sure that many other traders felt the same. So I’d say the speculative mkt tends to be short CHF for sure.

  2. Good morning Sean,

    To try to bring water to the mill on EUR/JPY, currently we have on technical side :

    1. We are back above 131.50 (previous resistance)
    2. Up trendline from 126.56 to 128.00
    3. 61.80% fibio at 129.50

    See chart :

    http://img42.imageshack.us/img42/1751/eg1c.jpg

    This pair seems in dips buying mode ? but since Monday the USD/JPY seems weak and we are near under 99.50, it could be interesting to watch the sell rallies ?

    See chart :

    http://img812.imageshack.us/img812/7843/owih.jpg

    I have no propositions trades on this pairs but just some thoughts.

    One final point, well done for AUD/USD ! Unfortunately I didn’t jumped last week, I was already engaged on EUR/JPY and we haven’t fallen in cheap price at .9050. C’est la vie !!

    Have a good day, see you tomorrow.

  3. I think its best to stick with technicals in EUR/GBP in absence of other factors so buying dips to 8570 with tightish stops below 8540 seems like most sensible play? Not really my side as I prefer to sell rallies so I’m leaving it alone

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