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Technical analysis of USD/JPY for June 19, 2015


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USD/JPY is expected to consolidate after hitting the six-day low of 122.47 on Thursday as markets awaited the Bank of Japan's monetary policy decision. USD/JPY is underpinned by the improved USD sentiment as fewer-than-expected 267,000 US jobless claims for the week ended on June 13 (versus forecast 276,000), stronger-than-expected rise in Philadelphia Fed general business activity index to 15.2 in June from May's 6.7 (versus forecast 8.0), larger-than-expected 0.7% rise in the US Conference Board May leading index (versus forecast 0.3%) offset lower-than-expected US May CPI of 0.4% on-month (versus forecast 0.5%) and core CPI of 0.1% on-month (versus forecast 0.2%). USD/JPY is also supported by the demand from Japan's importers, the Bank of Japan's ultra-loose monetary policy, and reduced safe-haven appeal of the yen amid positive global risk sentiment (VIX fear gauge eased 9.03% to 13.19; S&P 500 closed up 0.99% at 2,121.24 overnight). But USD/JPY gains are tempered by the Japanese exports and positions adjustment ahead of the weekend.

Technical comment:

The daily chart is still negative-biased as the MACD and stochastics are bearish.

Trading recommendations:

The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 122.45. A break of that target will move the pair further downwards to 122.15. The pivot point stands at 123.35. In case the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 123.70 and the second target at 124.10.

Resistance levels: 123.70 124.10 124.35

Support levels: 122.45 122.15 121.75

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