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    Analytical review of the currency pair USD/JPY on 16.03.2016

    USD/JPY

    Technical data of the currency pair:

    Previous closing: 113.15;
    Daily range: 113.03-113.56;
    Opening: 113.15;
    52- week range: 110.98-125.86;
    Annual revenue: -6.61%;
    Change in % for the previous day: -0.63.


    Analytical review:

    • In the last two sessions the currency pair has traded in the range of 113.35-114.00. During yesterday’s trading session the JPY has strengthened against the USD (over 100 points), exceeding support level of 113.35.
    • As expected yesterday the Bank of Japan left interest rate unchanged at the level of -0.1%. The Bank of Japan also did not change annual level of assets repurchase, leaving it at the level of 80 billion JPY.
    • Bank’s Management said that due the decrease of exports and production in the country, the bank can introduce additional incentive measures.
    • US statistics released yesterday showed that according to the US Commerce Department, retail sales in the country fell by 0.1%; producer price index fell by 0.2%.
    • Important US macro-economic statistics, which will become known today, can have significant impact on the currency pair. On Wednesday 16 March the US Fed will adopt interest rate decision.

    Summary:

    • During yesterday’s trading session the JPY has strengthened by 0.63% against the USD. Poor US macro-economic statistics and current monetary policy of the Bank of Japan trigger the rise in the Yen.
    • In the near future the JPY will strengthen against the USD. We recommend to open short positions.

    Trading tips for the currency pair USD/JPY

    Long-term trading:
    prior to the announcement of the interest rate decision by the US Fed on Wednesday, 16 March, the JPY is unlikely to change movement direction. At the moment we recommend to refrain from opening long-term transactions on the pair USD/JPY. It is advisable to enter the market after the release of the data, retesting the key support and resistance levels and in case of respective confirmation (for example, a pattern Price Action).


    Medium-term trading: the moment the currency is traded in the zone of 113.35-113.55. If the price maintains these levels and in case of the respective confirmation (such as pattern Price Action), we recommend to open short positions. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 113.10, 112.70 and 112.30 with the use of trailing stop.



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