The Japanese yen was seen gaining traction during the last couple of sessions. The USDJPY pair traded lower and broke the 120.00 support area. However, there is a chance that the pair might form a short-term bottom and could spike higher in the near term. So, I think buying in the short term is a good option as long as the sentiment remains in favor.
There is a bullish trend line formed on the hourly chart of the USDJPY pair, which might act as a support for the pair. The 200 moving average is also around the same area. Moreover, the last wave duplication area is coinciding with the highlighted support area around 119.50. So, if the pair moves a bit lower from the current levels, makes a stop around the support area and creates a divergence, then we might enter into a buy trade.
Initial target should be around the 120.40 level, and final target could be around the 120.70 level. Stop should be placed below the trend line and support area.
Reviewing recent events and trades
Yesterday, the US CB employment index was released, which was around the expectation. However, the US dollar was seen trading lower against a basket of currencies, including the British pound and the Euro. There were some other releases in Switzerland as well, which were on the disappointing side. The Swiss franc was seen trading lower initial, but after the US dollar slide it managed to recover the ground. Earlier during the Asian session, the NAB business confidence was released which decreased from 5 to 1.
Fundamental Outlook for the day
Today, the US wholesale inventories data and the NFIB business optimism index will be released. We need to see how the outcome shapes, as there is a chance that the US dollar might continue trading lower in the near term. If there is a slight miss in the outcome, then it might encourage the US dollar sellers. Later during the next Asian session, the Australian home loans data will be published, which might cause some action in the Aussie dollar pairs.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
