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Bank of Japan Governor Haruhiko Kuroda on Wednesday affirmed its upbeat view of the economy, even as global financial markets wobble, stressing that growth will pick up around mid-year as the sting of a sales tax hike fades.The dollar rose the most in two weeks against the yen as risk appetite swelled amid a higher-than-forecast gain in U.S. industrial production and as companies’ earnings topped estimates, damping demand for safety.
Technical view-
Forecast
The pair is facing strong resistance at 102.36 levels (50SMA). We are not in an upbeat in this pair until it crosses and closes above the 50SMA. For the last 3 months the pair spent most of its trading days below the 50SMA levels, that is not a bullish signal for the medium term view. Whenever it trades above the 50SMA, it will fly a bit and keep on taking support at the 101 levels. In the daily chart, we can observe the lower low formation, when it fell from the highs. The pair has strong support at 101.30 and 100.78 levels.
On the up side, if the pair trades above the 50SMA (red line) initially, it will go up to 102.75 levels, above this, 103.10, 103.40, 103.75, and 104 levels. In the weekly charts, the RSI is not favored longs, that means fresh upside breakouts are not possible. The bulls are back on track completely above 104.11 levels. The weekly support exists at 100.63 levels. A weekly close below this, we expect a major fall towards 97 levels. Until then, the pair trades within a range between 101.33 - 104.11. Bulls will enter fresh longs at every dip with sl 100.63 for target at 105.17.
Intraday-
The pair is facing resistance at the 38.2 fib level of 102.40 and 200EMA at 102.45 in the H4 chart. RSI still favors the long side for 1- or 2-day perspective, but only above 102.50, it is the safe buy. On the down side, 102 is the initial support for the day. Safe traders, sell below 102 with targets at 101.80, 101.66, and 101.50 levels.
Positional- Buy above 102.75 for targets at 103.10, 103.40, 103.75, and 104.
Intraday- Buy above 102.50 for targets at 102.75, 103.05, and 103.40.
Sell below 102.16 for targets at 101.80, 101.66, and 101.50 levels.
Adopt a strategy and trade safe
joseph.wind@analytics.instaforex.com
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