Ipek Ozkardeskaya
Swissquote Bank Ltd
USDJPY could be a cheap buy-on-dips before the end of quarter.
MACD convergence to signal a bullish reversal.
In Japan, the industry production may have slumped at a faster-than-expected speed in February (-6.2% m/m) according to the preliminary figure. The Nikkei and the Topix sold-off in Tokyo, the USDJPY eased to 112.25.
As we are approaching the month/quarter end, the USDJPY could be an interesting buy in dips into the 110.60 (March low) starting from April due to a relocation of the yen repatriated for the end of the quarter and also on the anticipation of a looser fiscal policy from Abe's government.
The MACD on a daily chart remains negative, yet the convergence signals that the downside momentum in the USDJPY has eased and renewed downside attempts could find a base before the 110.60/110.00 for a recovery to 113.25 (minor 23.6% retrace on Jan-Mar decline) before breaking into the daily Ichimoku cloud cover, 114.55 and testing the critical short-term resistance of 114.86 (major 38.2%). Only clearing the 114.85/115.00 resistance could signal a mid-term bullish reversal.
On an hourly chart, the intermediate supports are eyed at 111.87 (61.8% retrace on March 17 – 29 recovery), 111.40 (minor 76.4%) before the 110.60 dip.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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