Greenback vs Abenomics : Dollar trading with a twist
All eyes remain on fundamental trading today as data from the US and Japan is expected to give the currency pair a much needed jolt in volatility.
Although the data expected is a slightly “mixed bag”, it’s certainly not one that can’t be analysed with the ever present technicals. GDP and CPI figures due are expected to add bullishness to the dollar. However, a far more important economic indicator could very put the bears in positive territory. Unemployment benefits claimed are expected to rise by 13 million and could outweigh any bullish effect from prior announcements.
Further fundamentals to add to the woes of the USD:JPY long come later in the evening with the unemployment rate from Japan set to remain at a constant 3.7%. Although not the most positive of news, an increase would be far more bearish for the Yen.
The twist in trading the dollar yen currency major lies in the charts. Trading in a range of 104.313 resistance to support of 100.892 on the daily chart where the dollar lies just off resistance. Upon closer inspection of the longer term charting, the monthly chart sits at a bearish diagonal resistance indicating downside to the dollar and eventually a possible break through support of 100.892 on the daily.
Fundamentals today could very well be priced causing an immediate depreciation in the dollar versus the yen. Good potential short trade setups for forex traders on shorter time frames may be possible as the day progresses. As always though, proceed with caution as the news from the US affects all dollar incorporated trades and added volatility. A small leverage and volume traded will ensure your forex trades have a greater chance of success with a profitable outcome.
Good luck traders, let’s make some pips.
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