Forex Technical Analysis USD/JPY 2014-02-26

26 February, 2014

Good afternoon dear traders. Those who opened a position on the Japanese Yen yesterday, according to technical analysis , are in a negative zone now. The figure shows the author's position for yesterday's deal. We offer to wait patiently for the correction end, all the more so the ParabolicSAR and the first Pivot resistance confirm the set stop loss. To help you, we will continue to analyze this currency pair today.
We expect for the data on New Home Sales in the U.S. (16:00, CET). The index released by the Statistics Bureau of the United States characterizes the growth of houses for a family on an annual basis. It is a leading indicator of economic development, which has a multiplicative effect on various sectors of the economy: mortgage loans, insurance premiums, furniture, electronics, etc. If the actual value falls below the forecast of 406K, we expect the currency and investor confidence depreciation.

The USD/JPY has formed a Head and Shoulders model, which was violated last week. We can expect a significant downward momentum all the more so the weekly trend is bearish. The ParabolicSAR confirms investors' sentiment. Weekly downside price line is amplified by a similar line in the oscillator chart RSI-Bars(14). We will prepare for the breaktrough of the daily trend downwards. The target is set by the height of Head and Shoulders model and the next Fibonacci level system 161.8%. The stop loss should be kept at the same level (102,614). Today, it is recommended to place a pending sell order 15 minutes before the New Home Sales publication. The position should be kept only if the index gets lower than expected 406K. It is likely that the market falls amid forecast expectations because previous value of the macroeconomic indicator was higher (414K). As usual, we recommend moving the stop loss according to the ParabolicSAR.


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