Technical data of the currency pair:
Previous closing: 114.02;
Daily range: 113.74-114.35;
52- week range: 110.98-125.86;
Annual revenue: -5.16%;
Change in % for the previous day: +1.09;
- In the past 5 trading sessions the Yen has corrected by over 280 points after significant rise in the USD last month.
- Optimistic sentiments of the market participants about the state of the American economy boost demand for the USD.
- Important US statistics released showed that volume of outstanding housing sales contracts fell by 2.5%. The index of purchasing managers as per ISM increased to 49.5, which was above analysts’ expectations of 48.5.
- “Commitments of Traders” shows decline in demand for Japanese currency. Large speculators have increased short positions by 6691 contracts.
- This week we expect publication of important economic data from the US that may have a significant impact on the dynamics of the exchange rate. On Friday 4 March the data on non-farm payrolls will be known.
- During yesterday's trading session the Yen fell by 1.09% versus the USD. High volatility in the market and positive US macro-economic statistics might have strong impact on the pair. According to “COT,” large investors do not believe that the Yen will go up.
- It is likely that the pair USD/JPY will undergo correction. We recommend to open long positions.
Trading tips for the currency pair USD/JPY
Long-term trading: prior to the release of non-farm payrolls on Friday 4 March, the Australian dollar is unlikely to change movement direction. We recommend to refrain from opening long-term positions on the pair USD/JPY. It is better to enter the market after the release of statistics on Friday and after retesting of the key support and resistance levels and in case of the respective confirmations (for example: a pattern Price Action).
Medium-term trading: at the moment the currency has broken down resistance level of 113.95. If the currency maintains the area of demand between the levels of 113.95-114.20 and in case of the respective confirmations (for example: a pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of capital. Stop order can be placed slightly below the signal line. Take profit should be placed in parts at the levels of 114.80, 115.30 and 115.80 with the use of trailing stop.