A more technical look at the markets from InterTrader
Last week saw the Japanese yen lose its momentum after Friday’s US economic data pointed to signs of recovery. As a result, the USD/JPY was given a boost, allowing it to move higher above the ¥79.00 level.
The FX spread trading market has recently broken out of consolidation and it appears that it is set on running to the ¥80.00 area.
With currency and bonds spread betting markets extremely quiet in August, things are expected to heat up this week.
Spain is scheduled to sell government debt on Tuesday, German manufacturing data are coming out on Thursday and Greek and German Prime Ministers meet in Berlin this Friday.
At the time of writing, the ¥80.00 level is seen as a significant resistance barrier.
The MACD signal line is set to cross above the zero line and the RSI is seen clearly above the ¥50.00 level over the past two weeks.
Taking these into account, the technical setup on the daily chart could be favouring the continuation of the uptrend in the long run.
For a decisive bullish sign, a breakout above June’s high at the ¥80.60 level would be necessary. This would open the door for more upside movement towards the key resistance level at January’s highs above ¥83.00.
In the meantime, we could see a pullback to the ¥78.75 near-term support level offering buying opportunities.
Good luck and happy trading
Dafni Sedari, InterTrader
(Original article written 20 August 2012).
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