USDJPY: A cautious approach is required
|US$Jpy was choppy again on Friday, with the Yen seeing some demand on safe-haven grounds, which sent the pair down to 105.60 although it did bounce late in the day, back to 106.25 before closing at 106.00. More of the same looks likely while we wait on Wednesday’s FOMC Interest Rate Decision and, just as important, whether the dot-plot changes from 3 hikes to 4 for the rest of the year.
1 hour/4 hour indicators:Mixed.
Daily Indicators: Turning higher
Weekly Indicators: Turning lower
Preferred Strategy: A cautious approach is required, and Friday’s range of 105.59/106.37 may cover it. The momentum indicators do look mildly constructive and if we manage to break above 106.30/40, a test of the descending trend resistance at around 106.75 may be on the cards. Above here could stretch to 107.00 and then to 107.30/40.
On the downside, support will be seen at the 200 MMA at 105.70 and then at 105.60. Below here opens 105.25 and 105.00 although this is less favoured today and I prefer to buy dips.
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