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    Technical analysis of USD/JPY for March 09, 2016 2016-03-09


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    USD/JPY is expected to trade in a lower range.The US indices closed lower on Tuesday pressured by shares in the energy (-4.13%), banks (-2.55%) and automobiles & components (-2.49%) sectors. The Dow Jones Industrial Average dropped 0.6% to 16964.1, the S&P 500 fell 1.1% to 1979.3, and the Nasdaq Composite dropped 1.3% to 4648.8.

    Nymex crude oil was down 3.7% at $36.5 a barrel, while gold fell 0.1% to $1262.9 an ounce. The yield on the 10-year Treasury note dropped to 1.832% from 1.902% previously.

    The U.S. dollar was bullish against most of its counterparts on Tuesday with the exception of the JPY. On the economic data front, the NFIB small business optimism index fell in February to 92.9 (estimated 94.0) from 93.9 in the previous month.

    The euro was bullish against its major counterparts on Tuesday with the exception of USD and JPY. In the eurozone, GDP was 0.3% higher in the final quarter of the past year than in the three months to September. The German industrial production climbed 3.3% from the prior month after retreating a revised 0.3% in December. That's the biggest increase since September 2009.

    The Australian dollar was mixed against its major pairs on Tuesday.

    The pair is reversing down and has been capped by its descending 50-period moving average. Meanwhile, the relative strength index stays below 50. The first downside target is therefore set at the horizontal support and overlap at 112.10. A breakout below this level would open the way to further weakness toward 111.85 in extension.

    Trading Recommendation:

    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 112.10. A break of this target will move the pair further downwards to 111.85. The pivot point stands at 112.85. 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 113.25 and the second target at 113.55.

    Resistance levels: 113.25, 113.55, 114.25

    Support levels: 112.10, 111.85, 111.35

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