10, July 2014

USD/JPY (a 4-hour chart)

USD/JPY (a 4-hour chart)

General overview

The Japanese currency was the leader in the foreign exchange market and strengthened against all of its opponents. The yen strengthening was supported by a stock markets decrease - the Nikkei index fell by 0.4%, DJ by 0.67%, S&P by 0.68%, with the continuing decrease in the 10-year U.S. bonds yield. The statement made by the BoJ Deputy Governor about the inflation decrease expectations this summer and that the victory over deflation is not far away had no effect on the market.

The price is finding the first support 101.60, the next one is at 101.00. The price is finding the first resistance at 102.23, the next one is at 102.70. There is a non-confirmed and weak sell signal. The price is under the Cloud and it is under the Chinkou Span.

The Tenkan-sen shows a downward movement, and the Kijun-sen horizontal one and form a “Dead cross”. The downward movement will be until the price is under the Cloud.

The MACD indicator is in a negative territory. The price is correcting.

Trading recommendations

The dollar/yen trading has been in a side range for sixth month with basic levels - 101.30 - 102.70. The next strong support level of 101.60 retest for sellers may be accompanied by the price bounce up.