Market News and Research

USD/JPY stands at 200-hour SMA
Fri, 12 Jul 2019 12:04:57 GMT
Source: Dukascopy Bank SA
 

A surge up to the 108.60 level occurred on Thursday. It was followed by a decline back down to the 200-hour simple moving average, which was located at 108.28.

In general, the rate was about to get squeezed in between the 55 and 200-hour simple moving averages.

Latest Fundamental Event Report

The Federal Reserve released the US FOMC Meeting Minutes data , where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.

According to the official release: "Investors' concerns about downside risks to the economic outlook weighed on financial markets over the intermeeting period. Market participants cited negative news about international trade tensions and, to a lesser extent, soft U.S. and foreign economic data as factors that contributed to these developments.

Nominal Treasury yields posted notable declines and the expected path of policy shifted down considerably over the period. Equity prices declined, on net, and corporate bond spreads widened. However, financing conditions for businesses and households generally remained supportive of economic growth."


US PPI ends the week



On Friday, the US Producers Price Index will be released at 12:30 GMT. The event has caused moves from 3.9 to 31.9 pips. Although, note that the 31.9 pip move was actually caused by other announcements being made at the same time as the PPI was published.

For more information watch this week's Economic Calendar Analysis


USD/JPY short-term daily review

On Thursday, the USD/JPY currency pair tried to surpass the resistance formed by the 55– and 100-hour SMAs, located circa 108.50. During today's morning, the rate was testing the support formed by the 200-hour SMA at 108.28.

Given, that the exchange rate is squeezed by the given moving averages, it is likely, that it could trade sideways in the nearest future.

On the other hand, if the given resistance does not hold, it is expected, that the rate could target the psychological level at 108.80.

It is unlikely, that bears could prevail in the market, and the pair could drop lower than the 108.00 mark due to the lower boundary of the short-term ascending channel.

Hourly Chart



On the daily candle chart, the pressure of the approaching resistance of the 55-day simple moving average at 109.10 was strengthening the decline.

Meanwhile, the SMA was expected to strengthen the technical resistance levels at 108.90 in the near future. As that occurs, it will be less likely that this level would get passed in a surge.

Daily chart


Traders are long on USD/JPY

Since the middle of Thursday's trading session, on the Swiss Foreign Exchange 74% of trader open USD/JPY position volume was in long positions.

Traders have suffered losses during the recent three session decline.

Meanwhile, trader set up pending orders were neutral, as 50% of pending commands in the 100-pip range were set to buy and 50% were to sell.


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