USDJPY Long On Double Top

The USD/JPY pair remained well offered but has managed to stage a minor recovery from a fresh six-week low level of 105.74 to currently trade just above 106.00 handle (Daily Forex Technical Analysis).

daily forex technical analysis

ABCD Pattern On Dollar Yen

The Japanese Yen received a boost earlier, with risk aversion returning to the markets and driving the exchange rate significantly lower. There is a possibility of the 38.20% Fibo at 106.65 limiting the losses, despite volatility stretching out beyond 106.00 (Daily Forex Technical Analysis).

daily forex technical analysis

USDJPY Fed Scenarios | Daily Forex Technical Analysis

Daily chart shows the pair is moving in a falling channel and neared cyclical low of 105.55 (May 3rd low) earlier today. A day end closing below 105.55 would open doors for sharp losses. As of now, only Fed rate hike could save the day for Yen bears. Markets believe the Bank of Japan has run out of ammo and even more stimulus may not have intended effects. Consequently, if Fed statement fails to prop up rate hike bets, the spot could see a day end closing below 105.00. That would open doors for a slide to channel support around 102.00. On the other hand, we could see the pair break channel resistance and near 112.00 levels over the next month or so if July rate hike bets rise and there is no Brexit.

USDJPY Fed Scenarios | Daily Forex Technical Analysis

USDJPY Technical Levels

On the flip side, recovery momentum above 106.00 mark now seems to confront immediate resistance near 106.55-60 area. This is closely followed by a strong resistance near session peak level, around 107.00 handle.

daily forex technical analysis

USDJPY Edges Higher | Daily Forex Technical Analysis

The Bank of Japan is expected to remain on hold at its monetary policy meeting scheduled on June 16. Uncertainty at FOMC meeting scheduled on June 14 to 15, also supports reasons for the BoJ to remain muted this Thursday. USDJPY has breaks major support at 106.40, hits new 5-week low of 105.81. The pair remains capped below 5-DMA, has broken below 106.08 (weekly 200-SMA) and is testing lower Bollinger band at 105.75. Downside could see test of 105.55 (May 3rd lows) and then 105.20 (Oct 13th low). On the flipside, immediate resistance is seen at 106.40 (trendline) ahead of 106.82 (5-DMA). Good to sell rallies around 105.95/106 levels, SL: 106.50, TP: 105.55/105.20

USDJPY Edges Higher | Daily Forex Technical Analysis

USDJPY Technical Trade Setup

We foresee more bearish tendency in this pair after it has broken below support at 107.674 levels. As you can clearly observe it has been consistently drifting through sloping channel testing 7DMA as a stiff resistance. The current prices have been well below DMAs. 21DMA has crossed over 7DMA which is again a sell signal. While the leading oscillators converge to the on-going price dips. RSI at this juncture is converging dipping prices below 35 levels, while Stochastic curves have reached below 20 but traces of %K crossover, which means that bearish sentiments are intensified. On broader perspectives, this pair looks quite weaker ever since it has broken strong supports at 106.618 levels. Earlier also we traced long legged doji at 112.554 levels that is where 21DMA crosses over 7DMA.

Daily Forex Technical Analysis

There are lots of central bank meetings this week, but it’s looking ever more naive to expect them to be able to lift the tone in markets. The Fed meeting be a case of parsing the statement for marginal changes in tone, with more interest falling on the BoJ decision Thursday. Given the ever more unconventional nature of policies coming from central banks in general and the BoJ in particular, it’s difficult to envisage just what will be next. This week seems less likely for fresh policy action, not least given the prevailing uncertainties around Brexit which could change the yen outlook in less than 2 weeks.