USDJPY Technical Analysis 29 Nov

Summary
We get GDP data later today which may result in some moves on the USDollar though I think the outcome of the Opec meeting tomorrow is more important. Knowing that the oil price is incredibly important for inflation, should Opec not agree on a production cut/ freeze this would indicate that the oil price will continue to be at risk of dropping due to over supply which would be a risk to inflation. The Fed are watching this closely and it might be a deciding factor for a hike at the December meeting. So far an agreement does not seem likely though one should be prepared for anything. In the event of no cut the market may go into risk off mode which could result in a lower yield on the 10Y T-Note, a weaker USDollar and a stronger Yen. The yield has dropped slightly since Friday with the Nikkei and Dxy moving realtively sideways. Below is a technical analysis for Dxy, 10Y, Nikkei, USDJPY.

Keep in mind that a lot of the move on the 10Y yield we saw recently was on the back of Trump’s comments on fiscal spend, which is positive for inflation and therefore positive for the FOMC. Therefore anything that equals a drop in inflation could mean in a drop in the 10Y yield.

Remember – the purpose of looking at technical analysis on Dxy, the US 10Y and the Nikkei is not necessarily because you trade these asset classes but rather because they give you an indication of USDollar and Yen strength or weakness. Keeping an eye on these charts while trading Yen and/ or Dollar pairs helps you understand the bigger picture and as we know, the more information we have when making a decision on a trade, the better.

Dxy H4

Price came off WS1 yesterday giving bulls a target of WR1. WR1 coincides with the fib extension of the bullish move from WS1 to WPP. A trend line drawn from Friday's high and yesterday's high is providing resistance with price currently just below the 21 EMA. A break of this trend line and WPP would indicate a potential move to WR1 though we would need to get through resistance at MR2 and the previous support trend line drawn from 22 Nov and 23 Nov lows. Note the bearish target for the week is WS2 which is based on price coming off WPP and the 61.8% fib of Friday/ Sunday's bearish move. Let's take a look at H1 for a clearer picture.

Dxy H1

Price double bottomed at WS1 followed by a higher high with a retracement to the 61.8% fib. As you will notice the trend line drawn from 25 Nov and 28 Nov is providing resistance at DM3 with the trend line drawn from 28 Nov and 29 Nov lows providing support. A break of either trend line would indicate direction on the USDollar though pay attention to DS1 and DR1 as the potential top and bottom of a range price could be in at the moment. Note the bull target for the day is the fib extension from the 61.8% fib, which coincides with the DM4/ DR2 zone. The bear target is DM1 based on price currently coming off DM3.

US 10Y H4

Price broke through the H4 21 yesterday and is currently moving sideways. Currently at WM3 with the next level of resistance eyed at WR1 and support eyed at WPP.

US 10Y T-Note

Price is currently coming off the H1 21/ support trend line drawn from 25 Nov and 28 Nov lows with DR1 providing resistance and support identified at DPP/ WPP pivot cluster. A break of this trend line may see price move down to support at DPP/ WPP, while a move higher may see price move up to the 200 EMA.

Nikkei H1

The H4 chart shows price at WPP with no real movement since Friday. The H1 chart indicates resistance at today's DR1 and support at DM2 with price currently breaking out of a wedge to the downside with a target of DM1.

USDJPY H4

Price broke through the support trend line drawn off 17 Nov and 22 Nov lows and then retested this line as resistance and failed to break above. While price is currently moving sideways we can note that both bulls and bears are in play with the targets of WM4 and WM1 both being likely based on price having come off WM2 and the WM3/ WPP zone. Price is currently below the 21 though the moving averages are starting to flatten out. A bull would be looking for a break of WPP with an entry on the pull back while a bear is looking for a break of 111.000 and selling the pullback. H1 gives us a clearer picture.

USDJPY H1

Resistance eyed at DR1 and support eyed at DM2. Price is currently in a wedge with the bull target for the day being DM4 (after coming off DM2) and the bear target for the day is DM1/ DS2 (after coming off DPP). A breakout of this wedge at the apex would indicate direction on this pair.

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