As covered in previous post, this currency pair is currently in the consolidation phase as prices hovers around 0.89421 and 0.90372. Despite so, there is a very strong support at 0.89812, and this has been further confirmed by yesterday's price action, where there is a surge in price at 0.89812, along with a large increase in volume. However, there is a also a significant resistance at 0.90372. That being said, I would expect this currency pair to trend up next week given that Ben Bernanke will not be attending Jackson Hole symposium 2013 today, probably indicating that there will not be any significant news being released over the weekends.
Based on fundamental analysis, the 20-period SMA has crossed the 50-period SMA, but has much remained flat. Nevertheless, a downtrend reversal is very likely since the market closed at the support level of 0.90125, where there has been several Dojis forming at this area.
USDJPY Forecast
This is one of my favourite currency pair. There was a sharp drop in the price of this pair yesterday, accompanied with a large volume traded. This is probably due to the psychological resistance level of 99.00 causing the drop. The pair corrected itself from 98.479 to 98.471, with the market closing at 98.677. While the 20SMA has yet to cross the 50SMA, the drop in price along with correction to 98.471 and closing at 98.677 indicates that a downtrend looms ahead of this pair. A short position for this pair would be good when the markets open on Monday as the market corrects and prepare itself for the downtrend.
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