Article by ForexTime
The Japanese Yen has long been the favourite for currency hedging but has suffered in recent weeks as the market throws of negative sentiment about the health of the global economy. So far strong movements in the USDJPY and EURJPY have attracted strong interest from the trading community as they look to profit of the volatility of traders exiting this safe haven. Positive noise out of the European economy and the US economy has led to a renaissance of selling in safe haven pairs, and the Bank of Japan is not getting in the way as it looks to step aside and let the Yen devalue further in an effort to bolster inflation.
For the EURJPY the bulls are certainly in the driving seat and there is potential for further gains here as they look to climb of key levels and extend further. I’m also watching for a channel to form here as the Yen pairs tend to form controlled channels and love technical trading. Support levels can be found at 124.062 and 127.361. Key resistance which traders will be looking to aim for can be found at 131.486 and is likely to be tested if the bullish trend continues to run in the short term.
For the USDJPY it has finally broken out of it of the flag pattern that had formed over the last few months. As a result I would expect any pull back to trend the broken trend line as dynamic support in this instance, with the potential if it fall lower to test 112.552 and 111.579 respectively. Targets for the bullish trend to continue can be found at resistance levels at 115.396 and 116.998. Expectations are forming that this run could continue, but resistance at 118.553 could be a hard land in the side for bullish traders in the long run.
AUD traders will be watching the economic data due out shortly, as business confidence and home loan data will set the tone for a market which is very much aware of the volatility of the Australian economy. A strong reading would be a boost for the AUDUSD which has recently failed to extend higher. However the drop lower has hit strong support at 0.7581 and this has so far held back any further bearish advances. If we do see positive data we can be fairly positive in that we could see a rise to 0.7659 at least, with potential to extend even further up to 0.7719. However, this may take some time due to risk appetite at present. In the even there is a market drop I would anticipate 0.7581 and then 0.7535 as the key levels that will be targeted.
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Article by ForexTime
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