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USD/JPY – Vulnerable to Further Downside
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On Wednesday, USD remained weak against JPY as investors remained worried over the US debt ceiling debate. Adding to the pressure for USD was ADP report,
- On Wednesday, USD remained weak against JPY as investors remained worried over the US debt ceiling debate. Adding to the pressure for USD was ADP report, released on Wednesday, showing lower-than-anticipated addition of 166,000 private sector jobs in the month of September. Also on Wednesday, USDJPY currency pair settled below the 200-day SMA for the first time in the calendar year 2013.
- On Thursday, the pair witnessed some minor recovery from 97.30 – 97.20 support zone marked by 50% Fibonacci Retracement Level of Feb. to May 2013 up-move. This 97.20 support area also coincides with an ascending trend-line extending from Feb. 2013 low through June & August 2013 lows.
- Should the pair fail to hold this multiple support zone, it could possibly trigger additional weakness for the currency pair initially towards Aug. 2013 lows, 96.00 – 95.80 support zone marked by 61.8% retracement level. Further, a decisive break below Aug. 2013 lows could make the pair vulnerable to a fresh round of downward pressure in the near-term towards testing sub 93.00 level with intermediate support near 94.40 – 94.20 region.
- On the upside, 200-day SMA currently near 98.00 level now seems to provide immediate resistance for the currency pair. This seems to be closely followed by a strong resistance near 98.50 – 98.70 zone marked by 100-day SMA and 38.2% retracement level and could possibly cap any immediate upside for the currency pair.
- However, a decisive move above 98.50 – 98.70 zone might trigger a short-covering rally towards a very important psychological resistance near 99.80 – 100.00 zone.
- Considering that the pair has decisively weakened below its 200-day SMA for the first time in 2013, the pair seems more likely to continue drifting lower in the near-term. However, the short-term bearish outlook for the currency pair might get negated should the pair continue witnessing recovery from the trend-line support and decisively conquer 100-day SMA.
- Original Article: Admiral Markets and hyper link Admiral Markets with http://www.admiralmarkets.com/
About the Author
Haresh Menghaniauthor
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