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The Yen is Expected To Benefit From US Dollar Uncertainty Over Election Week 

Currencies / Japanese Yen Nov 08, 2016 - 04:16 AM GMT

By: Submissions


Adam Teen writes: The US dollar enters a crucial week against its rivals, including the Japanese Yen, as the volatile sessions are expected because the USA is officially going into polls on Tuesday 8th.

Strong economic performance data released over the past week did not quite convince investors that it is safe to hold the green buck over the next few sessions.

On the other hand, the Bank of Japan announced that it would leave the interest rates untouched and that the current rates would still keep inflation targets within reach, all though not convincingly.

The USD recovery against the JPY as a result had to be cut shot as the long term drop in the pair continued over the last two trading days.  

Bearish resumption on the 4 Hour Chart

Looking at the 4 hour chart and comparing the previous week’s momentum, our previous support of 103.157 was breached convincingly even though a slight bounce occurred before a sideways movement around that same support line resumed.

For the commencing of this week’s trading, our new support level is the 102.50 mark, which was the Friday low and also happens to be the same level that kept the USDJPY capped for the first three weeks of August 2016.

The Nov 3rd and 4th sideways range, however gives a hint that the bearish move is going through some headwinds and a very small recovery or a short period of profit taking may follow before a new push to lower levels.

Chart: USDJPY H4 with Fib levels

Trade ideas for the start of the election week

Tracing a Fib from the 31st top 105.535 and the most recent Friday low (102.50) brings focus to 103.60 (38.2%) as a reliable resistance zone to any bullish recovery that may occur from the current level.

It might be a good idea to sell any slight recovery occurring closest to 103.60 and below, as long as the 50% Fib (104.80) holds as formidable resistance.

Above 104.80 would mean that the bearish bias for the day should abort as that will likely expose last week’s high of 105.535 before a confirmation of the actual direction the pair takes.

Adam Teen is a published forex and binary options writer who regularly contributes to content on He is also an active swing trader and self-thought technical analyst.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice.

© 2016 Copyright  Adam Teen - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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