Technical analysis of USD/JPY for March 21, 2014

Show full picture Overview:The USD/JPY is expected to trade with bullish bias. Liquidity was thin in Asia today as financial markets in Japan were shut for holiday. The USD/JPY is underpinned by the positive dollar sentiment (ICE spot dollar index last 80.18 versus 80.01 early Thursday) after the Federal Reserve officials shifted forward their forecast for higher rates and Philadelphia Fed’s index of general business activity rose stronger than expected to plus 9.0 in March (versus 4.3 forecast) from minus 6.3 in February, while the U.S Conference Board leading index rose more-than-expected 0.5% (versus +0.3% forecast) in February. The USD/JPY is also supported by the higher U.S. Treasury yields, reduced safe-haven appeal of yen and yen-funded carry trades as global risk…

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Overview:
The USD/JPY is expected to trade with bullish bias. Liquidity was thin in Asia today as financial markets in Japan were shut for holiday. The USD/JPY is underpinned by the positive dollar sentiment (ICE spot dollar index last 80.18 versus 80.01 early Thursday) after the Federal Reserve officials shifted forward their forecast for higher rates and Philadelphia Fed’s index of general business activity rose stronger than expected to plus 9.0 in March (versus 4.3 forecast) from minus 6.3 in February, while the U.S Conference Board leading index rose more-than-expected 0.5% (versus +0.3% forecast) in February. The USD/JPY is also supported by the higher U.S. Treasury yields, reduced safe-haven appeal of yen and yen-funded carry trades as global risk sentiment improves (VIX fear gauge eased 3.97% to 14.52; S&P rose 0.6% overnight) on upbeat U.S. data and calmer investor nerves post-FOMC, loose monetary policy of the Bank of Japan and sell-yen orders from Japan importers. But the USD/JPY gains are tempered by the buy-yen orders from Japan exporters and positions’ adjustment before the weekend.

Technical сomment:


The daily chart is positive-biased as stochastics is rising from oversold zone, the MACD is staging bullish crossover against its exponential moving average and rate-of-change momentum indicator is advancing in positive territory.

Trading recommendation:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As far as the price is above its pivot point, a long position is recommended with the first target at 102.85 and the second target at 103.15. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.20. A breach of this target will push the pair further downwards and one may expect the second target at 100.64. The pivot point is at 101.75.

Resistance levels:

102.85

103.15

103.45

Support levels:

101.20

100.65

100.35

The material has been provided by InstaForex Company – www.instaforex.com

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Technical analysis of USD/JPY for March 21, 2014

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Week In FX Americas – The Loonies’ Week from Hell

via MarketPulse:

The Canadian dollar has taken it on the chin this week, already down -4.5% against its largest trading partner, the USD this year, the currency is closing out the week on the back foot and this despite the presence of a stronger retail sales headline print yesterday (+0.6%). Notwithstanding keeping rates on hold mid-week (+1%), the Bank of Canada’s policy statement leans towards a further easing bias, without explicitly making the change in stance.

Governor Poloz removed from its statement the phrase that the “substantial monetary policy stimulus currently in place remains appropriate,” which happened to appear in the last statement only a month ago. Many believe that within the context of the BoC’s heightened concern about persistently low inflation, the omission represents a step closer towards an easing bias.

However, on Friday, total inflation in Canada fell -0.2%, m/m in December, with a y/y pace of inflation to +1.2%, back into the Banks 1-3% target range from +0.9% in the month before. The increase in the yearly pace of both headline and core prices – up to +1.3% – is likely to bring some sense of calm to the “disinflation weary Governor Poloz.”

Canadian bond prices happened to soften slightly on the Canada’s inflation headline, but do remain better bid, along with US Treasurys from a flight to safety bid as investors scrambled out of riskier emerging assets. This too has the CAD shifting ever so slightly away from its newly cemented lows for the time being. Nevertheless, the “mighty buck” is expected to remain better bid on pullbacks until some normalcy reappears within all asset classes.

• Goldman Sachs CEO Still Sees Opportunities in Emerging Markets


• Canadian Inflation Hits 1.2 Percent in December


• US Attorney Pledges No Bank Too Big to Indict


• U.S. Treasurer Secretary Lew: Annual Growth could be 3%


• US Treasury Yields Lowest Since Taper


• US Unemployment Claims Rise Slightly But Trend Still Positive


• US Treasury Secretary Warns Lawmakers About Upcoming Debt Ceiling


• U.S. Dollar Continues to Roll


• Japan and US Agree To Cooperate Further on TPP Deal


• The Wealthy and the Wealth Gap


• U.S. Dollar Higher on U.S. Growth Prospects


• Global Investors Most Bullish Since 2009

WEEK AHEAD

* GBP Gross Domestic Product

* USD Durable Goods Orders

* USD Consumer Confidence

* USD Fed QE3 Pace

* USD FOMC Rate Decision

* NZD Reserve Bank of New Zealand Rate Decision

* EUR German Unemployment Rate

* EUR German Consumer Price Index

* USD Gross Domestic Product

* USD Personal Consumption

* JPY National Consumer Price Index

* EUR Euro-Zone Consumer Price Index

* CAD Gross Domestic Product

* CNY Manufacturing PMI

The post Week In FX Americas – The Loonies’ Week from Hell appeared first on MarketPulse.

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Week In FX Americas – The Loonies’ Week from Hell

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Week in FX Asia – All Eyes On China’s Growth Story

via MarketPulse:

The PBoC has ended the week guiding the Yuan higher via its daily reference rate, settling at 6.1041, a tad lower than Thursday close of 6.1065 mostly on the back of a weaker dollar overseas. CNY gained +2.9% against the dollar last year and +0.03% this week. However, trading continues to remain relatively thin ahead of this Mondays GDP release.

The market is expecting that China’s GDP rose +7.6% on year, down from +7.8% in Q3. Many have been calling for the Yuan to break the psychological +6.0000 level sometime this year. They expect China to speed up their financial market reform, including allowing freer cross-border capital flow, which should be reason enough to eventually lead to a stronger Yuan.

A surge in China’s foreign-exchange reserves will continue to add pressure on Yuan appreciation. Their fx reserves reached a staggering +$3.82-trillion at the end of last year, up from +$3.66-trillion in September. Breaking that down, China has boosted their US treasury holdings to a new record high last November (+$12.2-billion to +$1.3167-trillion). This is certainly a global market positive, as it’s a sign that they are not worried about the rise in long-term interest rates. A steady foreign appetite for US debt helps to contain the pace of rise in US bonds yields that is occurring in anticipation of further tapering by the Fed.

China and Japans demand for US assets is also a positive domestically for both the US consumer and businesses. Last Novembers treasury demand increase was the third consecutive monthly buy from China. Their healthy appetite for US debt is a byproduct of the limited options available to park their massive foreign reserves acquired from their trade surplus with the US. China, similar to Japan, is unlikely to dump Treasuries because that would not only hurt the US, but China as well.

In the short term, the Yuan is expected to remain firm in this uptrend ahead of the Lunar New Year at month-end, mostly because of domestic demand remaining relatively buoyant.

• Gandhi Heir to Lead Party in Election Campaign


• China GDP Release What to Expect


• China Regulator Urges Banks To Reduce Short-term Borrowing


• Japanese Government Revises Economy to Recovering


• Singaporean Data Shows Good Signs for 2014


• Asian Shares Lower Following the U.S. Lead


• Singapore Exports On Road To Expansion


• Singapore’s NODX up 6% in December


• Japan Wholesale Prices Rise 1.3 Percent in 2013


• Japan Business Lobby Publishes Need for Pay-scale-rises


• Japanese Machine Orders Rise 9.3 Percent in November


• China’s Holdings of U.S. Treasuries Up


• Japan On the Move


• China Sticks by its Guns with IMF


• Foreigners Continue to Buy Japanese Stocks


• Indian Inflation Eases to 6.16 Percent in December


• China Opens Gold Import Market Grants Licenses to Foreign Banks


• China Central Bank Tightening Policy Working For Now


• China’s Sovereign Fund “Interested in Global Infrastructure”


• China Beige Book: Not Easy to Assess Extent of Debt Levels


• China’s Credit Growth Slows


• Demand for Yen Carry Trade at Five Year High


• MAS: Singapore’s Property Market Is ‘Stabilizing’


• Some China Provinces Setting Lower 2014 Growth Targets


• Japan Posts Record Deficit Due to Yen Weakness


• Japan’s Key Economic Index Hits 5 Year High in November


• Thailand Protests Hit THB Highlights Divided Country


• India Recovery Loses Footing in 2014

WEEK AHEAD

* CNY GDP

* NZD Consumer Prices Index

* EUR German ZEW Survey

* JPY Bank of Japan Monetary Policy Statement

* AUD Consumer Prices Index

* CAD Bank of Canada Rate Decision

* CAD Consumer Price Index

The post Week in FX Asia – All Eyes On China’s Growth Story appeared first on MarketPulse.

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Week in FX Asia – All Eyes On China’s Growth Story

The post Week in FX Asia – All Eyes On China’s Growth Story appeared first on FX FOREX.

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