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    IronFX Intraday Comment | USD/JPY | 08/02/2016

    • The dollar traded lower against most of its major counterparts during the European morning Monday, in the absence of any major market moving events. It was higher against NZD, CAD and GBP in that order, while it traded lower vs SEK, JPY, EUR, CHF and NOK. The greenback remained virtually unchanged against AUD.

    • In a light calendar day, European equities have fallen sharply, with the UK FTSE down 2%, the German DAX down 2.8% and the Stoxx Europe 600 falling 2.4% at the time of writing. The main cause of the plunge appears to be the negative sentiment among investors, as concerns around a slowing global economy continue to mount. The main beneficiaries in this environment were the safe haven assets, with JPY, CHF and gold all posting significant gains during the day so far.

    • USD/JPY traded lower during the European morning Monday after it hit resistance at 117.50 (R1), near a short-term downtrend line. Bearing in mind that the price structure on the 4-hour chart remains lower peaks and lower troughs below that downtrend line, I would still see a negative short-term picture. A break below the 116.60 (S1) line is possible to aim for another test at the key support territory of 116.00 (S2). Nevertheless, taking a look at our short-term oscillators, I would be careful that another corrective bounce could be on the cards. The RSI exited its oversold zone and is now testing its 30 area as a support, while the MACD has bottomed and crossed above its trigger line. As for the bigger picture, with no clear evidence of a trending mode on the daily chart, I prefer to maintain my “wait and see” stance as far as the medium-term picture is concerned. I believe that a daily close below the 116.00 (S2) barrier is the move that could open the way for larger bearish extensions.

    • Support: 116.60 (S1), 116.00 (S2), 115.45 (S3)

    • Resistance: 117.50 (R1), 118.15 (R2), 119.00 (R3)

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