USD/JPY: Downside (Aug 27 , 2013)
USD/JPY is consolidating with risks skewed lower as U.S. data focus shift to 14:00 GMT U.S. August consumer confidence index (expected 79.1 versus July’s 80.3). USD/JPY is undermined by weaker dollar sentiment after bigger-than-expected 7.3% drop in U.S. July durable goods orders (versus minus 4.0% forecast) which reduced odds that the Federal Reserve will scale down its quantitative easing program next month; lower U.S. Treasury yields; Japan exporter sales; flows to haven yen amid increased risk aversion (VIX fear gauge rose 7.22% to 14.99, S&P fell 0.4% overnight) after U.S. Secretary of State John Kerry indicated that the White House is considering military action against Syria. But USD/JPY losses are tempered by demand from Japan importers. Daily chart is still positive-biased as MACD and stochastics are bullish, although latter is at overbought; five-day moving average is above 15-day MA and advancing.
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short positions are recommended with the first target at 97.5 in view; a breach of this target will move the pair downwards further and you should expect the second target at 97.1. The pivot point stands at 98.05. In case the price moves in the opposite direction, returns from its support, and moves above its pivot point, then trading in a higher range is the most favorable and positions buying is recommended above its pivot with the first target at 98.35 and the second target at 98.55.
S1 – 97.1
S2 – 96.85
S3 – 96.5
R1 – 98.35
R2 – 98.55
R3 – 98.85
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