As long as major currency pairs are stuck in a tight range due to the low volume of trades on holidays, there are some interesting actions on Japanese yen cross-rates. Asian investors are always looking for attractive markets, and Bank of Japan continues to support flows of speculative and credit capital from Japan by injecting enormous liquidity to the market. Borrowing fund remain cheap with interest rates at historical low levels. Traders and investors have not much of the choice when it comes to stable markets to direct capital flows. Except the leader worldwide economy, there is a Eurozone with sustainable economy growth and also Australia and Canada. The fundamental background of appreciation of the commodity currencies are described in the previous post.
Technically, USDJPY is in a very tight range recently, close to 2017 year high levels. My experience observing this pair tells me about possible test of current intraday support before setting for bullish uptrend and before reaching new highs. Looking at the H4 chart below, I would highlight the following supports:Ichimoku cloud base and local trendline at 112.883; local lows at 112.472. I would also say about the lowest level of such a possible whipsaw at 112.010, which could be used as a level to hide the stop-loss.
This chart and technical suggestions are not about my possible longs of USDJPY. My point is that we could see a retracement in EURJPY, AUDJPY and CADJPY, which should be considered as buying opportunity. Of course, we need to watch closely the momentum of pairs like EURUSD, AUDUSD and USDCAD before going long on yen crosses. Technicals are below.
I do not have a habit to buy on the top of the market. So I prefer to wait for a pull back and join the party with better ticket prices. However, the markets could not give us such a gift and possible retracement levels have to be updated in this case.
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