01, December 2014

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

Japan will publish a set of the important macroeconomic statistics where the October CPI data stand apart. On the one hand, we observed the yen devaluation and the money supply increase in October that is a positive factor for the inflation. On the other hand, the energy prices decline with the low household level will put pressure on the consumer price index.

The second consecutive week the price has been consolidating within the side corridor levels of 118.60 - 117.60. There was a short-term lower bound of 117.60 breakthrough, but the price returned back above the level, forming a high volume.

The price is finding the first support at 118.00, the next one is at 117.00. The price is finding the resistance at 119.20.

There is a confirmed and a strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement and form a “Golden Cross”. The upward movement will be until the price is above the Cloud.

The MACD indicator is in a neutral territory. The price is increasing.

Trading recommendations

We expect the third resistance level of 118.60 testing in the short term. If the price rises at the low volumes and at the relatively low volatility, the price rebound will be possible downwards.

The downward bounce potential target is 117.00. It can be followed by a price consolidation.