Moving Average In Play For The USD/JPY

Posted Monday, June 10, 2019 by
Shain Vernier • 1 min read

The Greenback is attempting to bounce back against the Japanese yen, establishing trade above the 108.50 level. Rates have stabilized since the 31 May plunge, with the USD/JPY putting in a short-term bottom in the vicinity of 108.00.

During the U.S. overnight, Japan released a series of Q1 GDP metrics. The reports came in positive, highlighted by Q1 2019 GDP (0.6%) beating expectations (0.4%) and Q4 2018 figures (0.5%). The news brought some intraday bids to the yen, but optimism has faded as the U.S. session has worn on.

Moving Average On The Horizon For The USD/JPY

The onset of June has brought largely rotational trading conditions to the USD/JPY. A defined “L” formation has developed on the daily chart, emphasized by compression between 108.50 and 108.00.

USD/JPY, Daily Chart
USD/JPY, Daily Chart

Here are the levels to watch as we move into the Tuesday forex session:

  • Resistance(1): Daily SMA, 108.91
  • Resistance(2): Bollinger MP, 109.33
  • Support(1): Swing Low, 107.81

Bottom Line: Until elected, I will have sell orders queued up from the Daily SMA at 108.91. With an initial stop at 109.26, this trade produces 25 pips on a 1:1 risk vs reward management plan.

All in all, it has been a relatively quiet open to the week for the USD. However, this will soon change, beginning with the Wednesday forex session and release of Chinese CPI (May). In addition, Wednesday also brings release of U.S. CPI (May). Traders will be searching each data set for clues on whom is getting the upper hand in the ongoing trade standoff ― the result will likely be volatility across the majors.

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