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Clueless Mr. Japan


May.28.2014

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While we had a ton of hot economic events yesterday to enjoy some short-term pips, including some weaker-than-expected European data, the economic calendar is pretty much empty today. So what’s better than picking on Mr. Japanese yen who is cluelessly dancing sideways against Ms. USA?

It’s been forming a number of spinning top candlesticks on the daily forex dance floor, below the flat Ichimoku cloud, with the Kijun line flattening and the RSI also flattening in the neutrality area. If you didn’t have enough of this word already, here it is one more time: FLAT!!

We are still awaiting the confirmation of the falling wedge to take us back to our previously set targets at 104 and 105. Alternatively a break below 100.3 could change our outlook to bearish with 97.7 and 96  as targets.

USDJPY technical candlestick chart analysis Ichimoku Falling wedge RSI spinning top candles

Intraday look for long positions above 101.7 with 102.15 and 102.35 as targets.

Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. And wait, are we hooked up on the social media? To get the most recent intraday updates, don’t forget to follow Invest Diva on Twitter and Facebook.

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 Yesterday's Hot Economic Events Recap

News that Europe wasn't going to be thrown to the ultra-radicals, along with positive data from the US was enough to continue upward trends in equity markets yesterday.

US equity markets saw further fresh highs after durable goods numbers and services PMI data beat expectations. Data out of the US now needs to tread that fine line between being positive, but not so positive that it leads investors to think that the Fed are going to speed up their reduction of QE, or go further and outright raise rates in the early part of 2015. all the while the data's beating the low expectations that have been set by the slow resumption of form, following the cold winter, they can have their cake and eat it.

European markets were also all in the green yesterday. The positive reaction to the elections over the weekend is well summed up in this article that we tweeted about yesterday. The point that investors are waiting for what Draghi has to offer resonates particularly well with us. There are only so many things the market can concentrate on at one time (normally one thing) and what Draghi will do next week is the more important, and more long awaited, market driver for the time being.

That said, we also saw the EU put Russian sanctions on the back burner after Vladmir Putin's apparent willingness to engage with Ukraine, following their weekend elections. This news has had a marginal catalytic effect on market movements, though it's probably fair to say that it's being taken with a pinch of salt for the time being.

Mark Carney spoke yesterday and it was rather refreshing that the subject wasn't the UK housing market. Mr Carney joined other heavyweight speakers at an Inclusive Capitalism event, where he highlighted the presence of growing inequality in the City of London and the worries that there hasn't been the fundamental changes to address the greed culture and appetite that caused the global financial crisis. We'd suggest a read of this Telegraph article if you want to hear his thoughts on other issues he is trying to tackle.

Markets in Asia followed the US higher overnight. Trading there has also pushed European futures higher, setting us up for a strong start. There's some key data points from Europe that could make or break that start. This includes German unemployment, European consumer confidence and Italian economic sentiment. The afternoon data sheet is completely empty, so expect Europe to set the tone and Wall Street to follow.

 

Intraday Forex Technical Levels

EUR/USD Intraday: under pressure.

Invest Diva likes: Short positions below 1.365 with targets @ 1.3585 & 1.3555 in extension.

If pair goes nuts: Above 1.365 look for further upside with 1.367 & 1.369 as targets.

What’s up on the dance floor: The pair remains under pressure and is bteaking below its support.

Supports and resistances:
1.369
1.367
1.365
1.3613 Last
1.3585
1.3555
1.353

GBP/USD Intraday: under pressure.

Invest Diva likes: Short positions below 1.678 with targets @ 1.673 & 1.67 in extension.

If pair goes nuts: Above 1.678 look for further upside with 1.682 & 1.6855 as targets.

What’s up on the dance floor: The pair stands below its new resistance and remains on the downside.

Supports and resistances:
1.6855
1.682
1.678
1.6745 Last
1.673
1.67
1.666

USD/JPY Intraday: the bias remains bullish.

Invest Diva likes: Long positions above 101.7 with targets @ 102.15 & 102.35 in extension.

If pair goes nuts: Below 101.7 look for further downside with 101.5 & 101.2 as targets.

What’s up on the dance floor: The pair is rebounding above its support.

Supports and resistances:
102.55
102.35
102.15
101.965 Last
101.7
101.5
101.2

 

USD/CHF Intraday: the bias remains bullish.

Invest Diva likes: Long positions above 0.895 with targets @ 0.901 & 0.903 in extension.

If pair goes nuts: Below 0.895 look for further downside with 0.8935 & 0.892 as targets.

What’s up on the dance floor: The pair remains on the upside and is approaching its previous top.

Supports and resistances:
0.904
0.903
0.901
0.8986 Last
0.895
0.8935
0.892

 

NZD/USD Intraday: the downside prevails.

Invest Diva likes: Short positions below 0.8525 with targets @ 0.8485 & 0.843 in extension.

If pair goes nuts: Above 0.8525 look for further upside with 0.857 & 0.8595 as targets.

What’s up on the dance floor: The break below the support at 0.8525 triggered a downward acceleration to 0.843.

Supports and resistances:
0.8595
0.857
0.8525
0.8492 Last
0.8485
0.843
0.84

 

AUD/USD Intraday: caution.

Invest Diva likes: Long positions above 0.923 with targets @ 0.9275 & 0.9315 in extension.

If pair goes nuts: Below 0.923 look for further downside with 0.9205 & 0.9175 as targets.

What’s up on the dance floor: The RSI is mixed and calls for caution. The pair is supported by a rising trend line. The upside breakout of 0.9275 will trigger a bullish acceleration.

Supports and resistances:
0.934
0.9315
0.9275
0.9238 Last
0.923
0.9205
0.9175

 

USD/CAD Intraday: bullish bias above 1.083.

Invest Diva likes: Long positions above 1.083 with targets @ 1.089 & 1.091 in extension.

If pair goes nuts: Below 1.083 look for further downside with 1.081 & 1.078 as targets.

What’s up on the dance floor: The RSI is bullish and calls for further upside.

Supports and resistances:
1.094
1.091
1.089
1.0854 Last
1.083
1.081
1.078

Intraday US Indexes Technical Levels

S&P500

Long positions above 1894 with targets @ 1915 & 1923 in extension.

Alternative scenario: Below 1894 look for further downside with 1883 & 1874 as targets.

 

Dow Jones

Long positions above 16560 with targets @ 16695 & 16780 in extension.

Alternative scenario: Below 16560 look for further downside with 16465 & 16390 as targets.

 

Nasdaq 100

Long positions above 3687 with targets @ 3734 & 3745 in extension.

Alternative scenario: Below 3687 look for further downside with 3660 & 3624 as targets.

 

Russell 2000

Long positions above 1133 with targets @ 1155 & 1162 in extension.

Alternative scenario: Below 1133 look for further downside with 1126 & 1116 as targets.

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