Technical Analysis – USDJPY eyeing sub-100 after it drops below cloud

XM Investment Research XM

The yen has managed to rally against the dollar for most of 2016, but is this rally running out of steam around the psychologically important 100 level? According to the charts, the most likely outcome is another test of 100 and then a possible break.

Although the daily chart gives a clearer bearish picture, here the 4-hourly chart is examined for shorter-timeframe trades. A test of 100 (100.06) both on September 22nd and September 27th showed the level holding and led to the US dollar rallying as far as 101.75-101.80. This was also the top of the cloud and the dollar was unable to exit the cloud on the upside. The top of the cloud at 101.75 could be a resistance level then. Subsequent dollar selling has led to the pair falling below the cloud to 100.80. Tenkan-sen is still above the Kijun-sen line however and for a confirmation of the bearish bias, Tenkan-sen (red line) has to drop below Kijun-sen (blue line). Present price action is below both lines right now, which is bearish in itself.

A very key area for dollar/yen then is the 99-100 level. Dollar/yen has not traded below the 99 level since 2013. Following Brexit, the pair tested the 99 level but quickly rebounded above 100. Levels that should be watched are 100, 99.60 (2-month low) and of course around 99 (post-Brexit and 3-year low).

Author

XM Investment Research

Manned by a powerful team of professionals, along with certified forex instructors, the XM Research and Education Center provides a full range of up-to-date marketing tools essential for profitable trading, including market analys

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.