Correction in USDJPY will be a classic buying opportunity (extract from Weekly Market Forecast 2nd of November 2014)

The USDJPY blasted higher during this week, as the fed interest rate decision was positive and the BOJ rate decision was negative for the Japanese yen. The pair broke an important resistance area, which is a very bullish sign in the medium term. So, I think every pullback or a correction can be seen as a buying opportunity.

There is an important bullish trend line forming on the 4 hour chart of the USDJPY pair. There was a critical resistance area around the 110.00 area, which was broken during this past week and might act as a strong support for the pair. So, if the pair moves lower from the current levels towards the mentioned trend line and support area, makes a stop and forms a bullish divergence, then we can enter into a buy trade. Remember, if the pair continues to trade higher, then our trend line and support area will also move higher.

Initial target should be around the 112.00 level, and final target could be around the 113.00 level. Stop should be placed below the highlighted trend line and support area.

Major events scheduled in the upcoming week
There was a gainer and a loser this past week. The gainer was the US dollar and loser was the Japanese yen. The fed interest rate decision caused the upside in the US dollar and on the other hand the BOJ interest rate decision caused the downside in the Japanese yen. The USDJPY pair traded around 300 pips higher after the release and sellers were brutally assaulted. The USDJPY pair traded above the 112.00 level and traded above multi-year highs. The pairs such as EURUSD, GBPUSD and AUDUSD closed the week on the negative note and looks set for more losses in the coming days. We need to see how the US dollar trades moving ahead.

Let us look at all major events lined up in the upcoming week.
Sunday – Chinese HSBC manufacturing PMI.

Monday – German manufacturing PMI, Euro zone manufacturing PMI, UK manufacturing PMI, US ISM manufacturing PMI, Australia’s retail sales and RBA interest rate decision.

Tuesday – UK construction PMI, US trade balance data and US factory orders.

Wednesday –Swiss CPI, German services PMI, Italian services PMI, Spanish services PMI, Euro zone services PMI, Euro zone retail sales, US ADP nonfarm employment change data, US ISM non-manufacturing PMI and Australia’s employment data.

Thursday – UK manufacturing production data, BOE interest rate decision, ECB interest rate decision, US initial jobless claims and Canadian Ivey PMI.

Friday –German industrial production, UK trade balance, US NFP data, US unemployment rate and Chinese trade balance data.

This analysis is taken from Weekly Market Forecast, which also includes trade opportunities on: GBPCHF, EURGBP, USDJPY, EURJPY, GBPJPY, AUDUSD, NZDUSD, AUDNZD, EURAUD, USDCAD and AUDCAD.
Get it HERE: Vladimir’s Markets Forecast

Happy trading friends!

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