USD / JPY: The focus of the week - 28 and 30 October_26/10/2015

Trading recommendations

Buy Stop 121.30. Stop-Loss 120.80. Take-Profit 121.40, 121.90, 122.40

Sell ​​Stop 120.70. Stop-Loss 121.10. Take-Profit 120.30, 119.90, 119.70



Technical Analysis

At the end of last week the pair USD / JPY has broken through the range in which it was mainly the beginning of September, between the levels of 120.60 (EMA144 and 61.8% Fibonacci level) and 119.60 (EMA200 on the daily chart).

The pair reached an important resistance level 121.50 (Fibonacci level 50%). It seems that today, Monday justify the status of the correction of the day and the US dollar decreased by opening the trading day almost all the dollar pairs. It is possible that the decline in USD / JPY pair may continue until the support level of 120.60, from which you can expect a new wave of growth.

The objectives can then be level 122.00, 122.50 (38.2% Fibonacci level), 123.70 (23.6% Fibonacci level), 124.50 (ceiling Kuroda).

If you confirm this scenario of decrease in pair will have to forget. A breakdown of the support level 118.85 (EMA50 Weekly chart) last week will have to be considered false. Only the return of the price below 119.60 could return a pair of downward momentum.

However, indicators OsMA and Stochastic on the 4-hour chart recommend short positions. On the daily chart the Stochastic also unfolds on the sale.


Overview and Dynamics

Despite the fact that the current week will be largely due to the remarkable number of scheduled economic news, the main

the attention of the financial markets will be focused on the Fed's next meeting, to be held October 27-28. It will be a decision on US interest rates.

Also scheduled for October 28 meeting of New Zealand, the Republic of Belarus, which will also decide the fate of interest rates in the country.

Next October 30 scheduled meeting of the Bank of Japan and the Bank's decision on interest rates in Japan. To date, the rate is 0.1%. Representatives of the Bank of Japan have repeatedly noted the possibility of further easing of monetary policy in the country, and as a possible mitigation through increased redemption of securities, and a decrease in interest rates. Earlier, the Bank of Japan's monetary policy remained unchanged at increasing the money supply by 80 trillion yen in the year and the increase in the program of asset purchases of up to 100 trillion yen is the most likely course of events. Last Friday, advisor to Prime Minister of Japan Etsuro Honda said that to revive the economy, the Government should pour into it an additional 5 trillion yen (41 billion US dollars). Currently, Japan's economy, though showing signs of recovery, the rate of inflation in the country remains far below the target level of 2.0%.

At the same time, according to the latest data, the consumer confidence index in Japan fell to 40.6 in September, instead of the forecast of 41.6 and 41.7 in August, orders for machinery and equipment in September fell by 19.1% in annual terms, compared with a fall of 16.5% in August.

The undoubted negative factor for Japan's export-oriented economy is the slowdown in the Chinese economy as the most important trading partner of Japan.

Thus, imports into China in September decreased by 17.7 %% at the forecast reduction by 15%, exports fell by 1.1% compared with the same period last year.

The wave of sales on the Chinese stock market a month ago pulled him strong sales and stocks in other parts of the world, including in the Japanese stock market.

The fragile recovery of the Chinese stock market and the efforts of the government and the monetary authorities of the country may not be sufficient.

And, if the Fed will refrain from raising interest rates in the US on October 28 that it could push the BoJ to further mitigate the extra loose monetary policy in the country, with over 30 of October.

Meanwhile, Chinese stocks closed the Asian trading session, a slight increase. ChiNext Index on the session rose by 0,4%, Shenzhen Composite - on 0,7%, Shanghai Composite - 0.5%. Also increased and the Japanese Nikkei Stock Average on trades of 0.7%.

However, the pair USD / JPY dropping from the opening day after a strong growth on Thursday and Friday. By the opening of the European session, the pair has lost about 50 points. From the news today is worth paying attention to 17:00 (GMT + 3) when they leave the data on new home sales in the US in September.

Also, please note that this is the last week of the month, and possible profit-taking.