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    Technical analysis of USD/JPY for June 09, 2016 2016-06-09

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    USD/JPY is under pressure. On Wednesday, US stock indices continued to grind higher, chalking a winning streak of three straight sessions. The Dow Jones Industrial Average rose 0.4% to 18004, the first close above the 18000 level since April 27. The S&P 500 increased 0.3% to 2119, and the Nasdaq Composite was also up 0.3% to 4974. Industrial and material shares performed well, while energy shares were lower despite oil prices hitting 2016 highs again.

    Nymex crude oil charged 1.7% higher to $51.23 a barrel, the highest closing level since July 15. Gold jumped 1.5% to $1,262 per ounce, and silver surged 3.9% to $17.02 per ounce. The benchmark 10-year treasury yield eased further to 1.701% from 1.713% Tuesday.

    Lacking upward momentum, the US dollar continued to weaken against other major currencies. The ICE US Dollar Index fell 0.3% to a one-month low of 93.59. EUR/USD climbed 0.3% to 1.1392, and USD/JPY shed 0.3% to 106.97.

    Boosted by the bullish bias of the commodities markets, commodities-linked currencies were broadly higher. USD/CAD declined another 0.3% to 1.2693, tallying a loss of 3.1%, or 402 pips, in a losing streak of 4 consecutive sessions.

    AUD/USD gained 0.2% to 0.7468, and NZD/USD rose 0.4% to 0.7003 yesterday. This morning, NZD/USD soared 1.9% up to 0.7138 after New Zealand's central bank, as expected, held its official cash rate unchanged at 2.25%. The pair continues to trade on the downside while displaying a pattern of lower highs and lower lows. Currently it is capped by the descending 50-period (30-minute chart) moving average. The 20-period moving average remains below the 50-period one, and the intraday relative strength index stands below the neutrality level of 50. The intraday outlook is still bearish, and the pair is expected to decline toward the immediate support at 106.00 before sinking further to 105.55.

    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 106.00. A break of this target will move the pair further downwards to 105.50. The pivot point stands at 107.15. 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 107.45 and the second one at 107.95.

    Resistance levels: 107.45, 107.95, 108.50

    Support levels: 106.00, 105.50, 105.15


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