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    Technical analysis and trading recommendation for USD against CAD & YEN for April 13, 2015

    FOMC member Lacker speech took place in the Global Interdependence Center, Sarasota on Friday. In his own words: I am headed, over the next couple of years I expect to see solid growth and inflation moving back toward 2 percent. Based on that outlook, I believe a strong case can be made for an increase in the federal funds rate target relatively soon.

    The US dollar rebounded from the double bottom. It is likely to create the double bottom around 96.20. At Thursday's session, we recommended buying above 98.30 with targets at 98.50 and 98.64. Bulls can challenge 99.80 in a day or two. In two days, the USDX made a high at 99.69. It's another stellar move. The USD index has been moving higher for sixth consecutive days, including today's Asian session. Eventually, the USDX is likely to go above 103.00.


    At today's Asian session, Japanese core machinery orders and monetary policy meeting minutes were released. In February, core machinery orders fell. Total value of machinery orders, received by 280 manufacturers in Japan, decreased by 1.4% on a seasonally adjusted basis in February from the previous month.

    The Bank of Japan Policy Board's Monetary Policy Meeting was held in the head office in Tokyo on Monday, March 16 and 17, 2015. Minutes were just released. Many members said they are ready to continue easing until inflation stables at 2%. Exports were expected to increase moderately, mainly against the background of the recovery in overseas economies. The year-on-year rate of increase in the CPI (all items less fresh food) was in the range of 0.0-0.5 percent. The year-on-year rate of increase in the CPI was likely to be about 0 percent due to the effects of a decline in energy prices.


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    JPY started trading lower against USD on the back of these data. We repeatedly advised buying on every dip with sl 117.50. The pair made a low at 118.30 changed its direction. Now, a daily close above 120.50 leads to 122.00. At Friday's session, the pair made a high at 120.74 but erased its gains at the end of the day. Until the price closes above 119.00, a target is likely to be at 122.00 initially and at 125-126 later. The weekly trend favors buying with sl 119.80, and positional buyers can use sl 119.00 waiting for 121.50 and 122.00. Multiple intervals hourly and four-hour chart favors buyers. Until the pair closes above 119.40, the trend favors long positions. Intraday support is found at 119.80. Higher highs and higher lows formation takes place in the hourly and four-hour chart. We can observe a minor bullish inverse head and shoulder formation likely for 122.00 with sl 119.40.

    Canada jobs data pushed the Loonie higher against USD at Friday's session. Employment increased by 29,000 in March, driven by gains in part-time work. The unemployment rate remained unchanged at 6.8%. Over the first quarter, employment gains totaled 63,000 ( 0.4%), the result of more part-time work. The pair found support at 50Dsma 1.2550 at Friday's session and today's Asian session. At Friday's session, we recommend fresh buying at 1.2530 but the pair made a low at 1.2563 and changed its direction. Intraday support is found at 1.2560 and weekly support is found at 1.2520 and 1.2500. Until the pair closes above 1.2500, bullish view will stay in play with targets at 1.2700 and 1.2750 in the near term. Ahead of tomorrow's big major data from the US, today we expect buyers to mint the money. For an intraday view, we recommend buying with sl 1.2560 with targets at 1.2620, 1.2635, 1.2650, and 1.2700.

    Trade: Buying with sl 1.2560


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