USD/JPY Clears Monthly Range, Trendline Resistance Ahead of U.S. CPI

Talking Points

  • USDJPY miscarry in focus- constructive above weekly open
  • Updated targets cancellation levels
  • Looking for some-more trade ideas? Review DailyFX’s 2017 Trading Guides. Join Michael for Live Weekly Trading Webinars on Mondays at 13:30GMT (8:30ET)

USD/JPY Daily

USDJPY Daily Chart

Technical Outlook:Last week we highlighted a key support confluence in USDJPY during 111.07/45 with a brief disposition during risk into this region. The span incited only forward of this section on a mangle of a weekly opening-range. The allege has now tested former 2017 channel insurgency as support and keeps a concentration aloft while above a weekly open. Note that if we tighten during these levels, a span will have also noted a mangle of a weekly monthly opening operation highs. Look for initial insurgency targets during a 50-line of a descending pitchfork corroborated by pivotal insurgency during 115.51 116.08– a crack / tighten above this segment is indispensable to advise a some-more poignant low is in place.

USD/JPY 120min

USDJPY 120min Chart

Notes:A closer demeanour during cost movement has USDJPY trade within a proportions of a near-term descending channel arrangement with channel support highlighting a near-term bullish cancellation turn during a weekly open during 113.55. Topside insurgency targets are eyed during 114.82 a 115.10both of that converged on channel insurgency into European trade tomorrow. A mangle there, eyes pivotal insurgency during a 115.79/93Fibonacci confluence.

From a trade standpoint, I’ll demeanour to blur debility while within this arrangement with a crack above a Aug 2015 lows during 116.08 indispensable to fuel a subsequent ‘Big’ leg aloft for USDJPY. A mangle / tighten next a monthly open during 112.80 would be indispensable to change a broader concentration behind to a short-side with such a unfolding targeting a reduce together a 111.11/45 pivotal support zone.

A entertain of a daily normal loyal operation (ATR) yields distinction targets of 32-36 pips per scalp. Added counsel is fitting streamer into a recover of a U.S. Jan Consumer Price Index tomorrow with a imitation approaching to fuel increasing sensitivity in a dollar crosses. Headline CPI is approaching to imitation during an annualized rate of 2.4% – that would be a top review given Mar 2012 (was 2.7% then).

USD/JPY Clears Monthly Range, Trendline Resistance Ahead of U.S. CPI

  • A outline of a DailyFX Speculative Sentiment Index (SSI) shows traders are prolonged USDJPY- a ratio stands during +1.05 (51% of traders are long)- intensely weak bearishreading
  • Long positions are 6.3% reduce than yesterday and a full 22.5% next levels seen final week
  • Short positions are 9.0% aloft than yesterday and 18.9% above levels seen final week
  • Open seductiveness is 0.6% aloft than yesterday though 3.3% next a monthly normal
  • While a stream SSI form offers small confidence, it’s value observant that a continued squeezing in a ratio from a new extremes of +2.15 was accompanied by a change in cost function / annulment and keeps a risk weighted to a topside for now. Look for a build in brief positioning to serve countenance a long-bias.

Relevant Data Releases

USD/JPY Clears Monthly Range, Trendline Resistance Ahead of U.S. CPI

Other Setups in Play:

  • EUR/GBP Approaching Key Support Targets – 8400 in Focus Ahead UK CPI
  • Weekly Strategy Webinar: USD Rebound Hinges on Yellen Testimony
  • Silver Eyes Key Resistance- Weakness to Be Viewed as Opportunity
  • EUR/USD Eyes 1.0580 Support Ahead of 4Q GDP
  • NZD/USD Rally Vulnerable Ahead of 7300- New Zealand CPI on Tap

—Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex hit him during mboutros@dailyfx.com or Click Here to be combined to his email placement list.

About author