To receive Michael’s analysis directly via email, please SIGN UP HERE
- USDJPY testing range highs ahead of NFP- Focus is on key resistance at 114.50
- Check out our 4Q USD/JPY projections in our Free DailyFX Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
USD/JPY Daily Chart
Technical Outlook:USD/JPY is trading just below a critical resistance barrier at 114.30/50- a region defined by the 61.8% retracement of the yearly range and the May and July swing highs. The focus is on this key threshold heading into tomorrow’s U.S. Non-Farm Payrolls (NFP) report and the November open.
New to Forex? Get started with this Free Beginners Guide
Daily support rests back at the October open at 112.65 with broader bullish invalidation down at 111.60/72 (key support confluence). A breach higher from here targets 115.44/52 where the 61.8% retracement of the broader 2015 decline converges on the 61.8% extension of the advance off the September lows. Subsequent targets eyed at the yearly open at 116.98 which converges on the 50-line later this month.
Why does the average trader lose? Avoid these Mistakes in your trading
USD/JPY 240min Chart
Notes: A closer look at price action highlights a near-term ascending median-line formation extending off August & September lows with price opening the month just below key resistance. From a trading standpoint, the immediate advance remains vulnerable while below this threshold with near-term support eyed at 113.05. A break below the October open at 112.64 would be needed to validate a near-term reversal with such a scenario targeting initial support objectives at 111.73 & 110.67/82.
Bottom line: the immediate focus is on a break of the 113-114.50 range to offer guidance on our medium-term directional bias. Ultimately a lager pullback would offer more favorable long-entries lower down.
Join Michael on Friday for his bi-weekly Live Webinar on the Foundations of Technical Analysis- Register for Free Here!
- A summary of IG Client Sentimentshows traders are net-short USDJPY- the ratio stands at -1.3 (43.5% of traders are long) – Weak bullishreading
- Long positions are 18.8% lower than yesterday and 14.7% lower from last week
- Short positions are 3.3% higher than yesterday and 3.4% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger USDJPY-bullish contrarian trading bias from a sentiment standpoint.
See how shifts in USD/JPY retail positioning are impacting trend- Click here to learn more about sentiment!
Relevant Data Releases
Check out this week’s DailyFX Webinar Schedule
Other Setups in Play
- GBP/USD Rebound to Face FOMC, BoE, NFP- Levels to Know
- USD/CAD Eyes Resistance Ahead of FOMC, US & Canada Employment
- Weekly Technical Outlook: Stormy Seas Heading into BoE, FOMC & NFP
- EUR/JPY Plummets into Monthly Lows
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at email@example.com.