Hugo
0
All posts from Hugo
Hugo in HTO Trading,

USDJPY: A downward correction is due before more gains

Last week, USDJPY hit 109.5 its highest level since August 2008. This recent move higher in USDJPY has been driven partly by the USD strength, as it becomes apparent that US QE really is coming to an end next month, and that the US Federal Reserve may even raise rates next year.

Today on the economic calendar we have from Japan the unemployment rate in August that is expected to stay unchanged at 3.8%. From the U.S we have the personal income in August that is expected to rise from 0.2% to 0.3% providing an insight on the US employment situation.

On Friday the USDJPY fell during the start of the day but bounce from the 10 day moving average making fresh highs at 109.53. The pair has been in consolidation since the beginning of last week and the stochastic is in a overbought condition since mid-August so a downward correction is due.

Expecting downward move to daily support at 107.40 on a break below daily resistance at 108.76 (scenario 1) or a break above Fridays high at 109.50 could pull USDJPY to 110.90 (scenario 2).