The USDJPY pair is trading in 100 pips range for the last couple of days. In my view, the pair may trade higher again in the short term. There are chances that the pair can test the previous highs in the coming days. So, I think we should be looking for buy opportunities.
Looking at the 4 hour chart of USDJPY, there is a down-move trend line, which is holding the pair as of now. If the pair manages to climb higher, break this trend line and close above it, then we will enter into a buy trade.
Alternatively, if the pair moves lower, then we may look to buy dips at around the support levels such as 103.60 and 103.40. If the pair drops closer to these support levels, stops and forms a divergence, then we will jump into a buy trade.
Initial target should be around the 105.40 level for the scenario, and 104.40 for the second scenario. Final target could be around the 105.80 level for the first scenario, and 105.20 for the second scenario. Stop should be placed below the broken trend line in the first case, and below the 103.10 level in the second case.
Reviewing yesterday’s events and trades
Yesterday, in the European session, the UK employment report was released. The outcome was surprising as the unemployment rate dropped to 7.1%, which is closer to the BOE 7.0% threshold. This was very positive for the pound, and as a result, the GBPUSD traded higher towards the 1.6600 level. Later, during the US session, BOC announced the interest rates. They left the rates unchanged, but the BOC governor talked about some concerns regarding the economy, which weighed on the Canadian dollar, and the USDCAD traded much higher. The pair traded above the 1.1120 level.
Fundamental Outlook for the day
Today, in the European session, there are some key events scheduled, including the manufacturing and services PMI’s. These events can play an important role for the Euro, and can move the EURUSD for at least 40-50 pips. Later, during the NY session, we have the US existing home sales and the Canadian retail sales data scheduled. I do not expect much movement following the existing home sales data. However, we need to keep an eye on some pairs like GBPUSD and AUDUSD. These pairs are trading at crucial levels, and any major move can trigger a breakout.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, NZDUSDU, EURGBP, AUDUSD, EURAUD, EURJPY, EURCHF, OIL and GOLD.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
