Yen up, kiwi down in early trading

Daily forex winners & losers

Daily forex winners & losers

 

The Japanese yen is the top performer against a stronger dollar at the close of European trade with loss of just 0.11% on the session. The greenback has continued to outperform all its major counterparts as markets remain on the defensive after a weaker than expected ADP employment report showed the addition of just 119K private sector jobs in April, missing consensus estimates for a print of 170K. Risk-off flows have supported both the greenback and the yen with equity markets and Treasury yields trading markedly lower in early US trade.

 

The USDJPY continues to trade within the confines of a flag formation off the March highs with the exchange rate holding above the 50% Fibonacci retracement taken off the February advance at 79.90. We continue to favor long entries between the 61.8% retracement at the 79-figure and the 100-day moving average at 79.57 with a break above daily RSI trendline resistance likely to mark the end of the yen correction.

 

The scalp chart shows the pair rebounding off of soft support at 79.70 yesterday before reversing course just ahead of the 38.2% Fibonacci extension taken form the April 1st and 20th crests at 80.60. Interim support rests with the 61.8% extension just shy of the 80-handle with subsequent floors seen at 79.70 and the 78.6% extension at 79.40. A breach above interim resistance at the 50% extension at 80.30 eyes topside targets at 80.60 and channel resistance. Again we note that a breach above this channel would likely mark the completion of said yen correction with longer-term objectives held at the 83-figure and 83.70.

 

Yen levels

Level/Indicator

Level

200-Day SMA

78.33

100-Day SMA

79.57

50-Day SMA

81.70

2012 jpy High

76.02

 

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