2016-08-25 11:42:15

Technical performance:

Prev. closure: 100.45; Daily range: 100.35-100.62;
Opening: 100.45; 52-week range: 99.08-123.69;
Annual profit: -15.55%; Previous day's change (%): +0.19.

Analytical review:

  • The safe heaven currency consolidated considerably against the USD in the past month (by over 600 points). The currency pair has been trading in a range of 99.85-100.95 for the past two weeks.
  • Important stats on the US housing market have been released this week. The Census Bureau reported that new home sales increased from 582000 to 654000, exceeding market expectation of 580000;
  • At the same time, according to the US National Association of Realtors, sales in the secondary housing market dropped to 5.39М. Analysts predicted a value of 5.51М;
  • The Commitments of Traders Report shows that important market operators have increased the number of their long positions by 1432 contracts to 84494 contracts. The number of short positions amounts to 31623 contracts.
  • A news factor is worth attention this week: publication of the US' GDP (Friday) and FED Head Yellen's statement (Friday). These events may affect market volatility.

Summary:

  • Ambiguous data on the US housing market and FED's disagreement about a further tightening of the monetary policy put pressure on the dynamics of the USD/JPY pair. According to the Commitments of Traders Report, important operators have increased their long positions.
  • Thus, there is no unidirectional movement in the market. We recommend searching for market entry points from key support and resistance levels.

Trading tips for USD/JPY

Key levels:
Support levels: 99.85
Resistance levels: 100.95, 102.20

Medium-term trading, H4
The currency is currently trading near a supply zone of 100.45-100.65. Once this zone steadies and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 99.90, 99.50 and 99.00, with Trailing Stop applied.

Medium-term trading, H4
Medium-term trading, H4

Short-term trading, M15
The currency is trading at 100.35-100.50. We advise you to search for market entry points once this zone is broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

Short-term trading, M15
Short-term trading, M15