USD/JPY: Good near term support is forming at 106.95 [Video]

Richard Perry Independent Analyst

USD/JPY

In yesterday’s analysis we discussed the potential for a near term rebound from the medium term support area between 106/107. With so many retreats into this band over recent months, time and again finding willing buyers, it was interesting to see once more this coming through in yesterday’s session. The strong positive candle that built throughout the session has subsequently retraced the negative implications of Friday’s sell-off and builds the potential for a near term recovery now. The first test if a little two week downtrend (today at 107.35) which needs to be broken. In such a tight consolidation, trendlines mean little and will often be broken. However, they can imply subtle shifts in sentiment. Daily momentum is mixed (Stochastics falling, RSI rising and MACD flat), but an improvement is being seen across the hourly indicators. A new run of higher lows and higher highs, whilst the hourly RSI moved above 70 for the first time in two weeks, and good near term support is forming at 106.95/107.10. A move above 107.40 would open the next line of resistance at 107.75 but also swing the market into a confirmed new phase of recovery within the medium term range.

Author

Richard Perry

Independent Analyst

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.