The US dollar has recently gained some momentum against the Japanese yen. However, the USDJPY pair is heading towards a critical resistance zone in the short term. If the pair climbs from the current levels towards the 103.00 resistance zone, makes a stop and creates a bearish divergence, then we can jump into a sell trade.
Alternatively, there is a channel forming on the 4 hour chart for the USDJPY pair. There is also a support area at around the 102.10-00 levels. If the pair manages to break the mentioned support zone, then we can jump into a sell trade once the pair retraces back to re-test the broken support zone. Remember, wait for the pair to close below the support zone to avoid any false break trading.
Initial target should be around the 101.40, and final target could be around the 101.10 level. Stop should be placed above 103.10 in the first scenario, and above the broken support zone in the second case.
Reviewing yesterday’s events and trades
Yesterday, there were hardly any major economic releases during the London and the New York session. The only economic release was the Canadian housing starts data, which came better than expected. The market was mostly seen trading in a range throughout the day. However, earlier during the Asian session, the Chinese CPI data was published, which managed to register a better than expected reading. This has resulted in a bullish mood in the market, as the pairs like EURUSD, AUDUSD and NZDUSD were seen trading higher.
Fundamental Outlook for the day
Today, during the New York session, the US wholesale inventories data, National Federation of Independent Business (NFIB) Small Business Optimism Index and JOLTs job openings data will be published. These are not high-risk events, but can cause some moves in the market. Later during the Asian session, the Australian Westpac consumer sentiment data will be released, which could impact the Australian dollar in the short term.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, USDCAD, NZDUSD and AUDUSD.
Get it HERE: Vladimir’s Markets Forecast
Have a great trading week friends. Happy trading!
