Analysis of JPY against EUR&GBP
The report on the results of Japanese prelim industrial production was released at the Asian session. The Japan industrial output was disappointed in February. Data was printed at negative 3.4%, the lowest level since June, 2014, compared to 3.7% positive. After the data was released JPY was trading lower against USD, EUR & GBP.
At the trading session on Friday, the pair rejected at 20Dsma and closed below that level. The cross made a double top at 131.67. It was parallel resistance, which the pair was unable to breach for 3 consecutive days. As we expected, the hourly candle closed below 130.50 and we can conclude the near-term trend is capped. The cross has been expanding its rising hourly wedge. Intraday resistance is seen at 130.50. Use every rise to sell with sl 130.50. For today’s session, we recommend fresh safe selling below 129.00 with targets at 128.60, 128.30, and 128.00. The positional selling is not confirmed with sl 130.50. Intraday parallel support is likely to be found at 129.40 .
Trade: Sell any rise to sell with sl 130.50, safe selling below 129.00.
The pair gave a down side break head and shoulder at 181.50, expanding lower lows and lower highs in the h4 chart. Initially, we were bullish on this cross, later we change our view favors to bears. We advised selling below 181.50 with target at 178. The cross made a low at 177.25 and spike to 180.99. It was rejected near the neckline and pushed back to new lows again. Eventually, the pound looks weak against USD ahead of political drama. The UK is slowly approaching its general election scheduled for May. Market participants expect the pound to get under a downward pressure. In February, the cross made a low at 175.49, 200Dema and 200Dsma helped the price to push back to 185.00. Currently, the same 200Dema and 200Dsma are acting as strong resistance averages 178.20. This week closing will give a clear hint, because the cross has been consolidating at 50Wsma for 1-week. The parallel support is found at 175.49, below this steep is likely to fall towards 172.60.
We recommend intraday selling below 177.00 with targets at 176.70 and 176.50. Strong selling will emerge below 176.40 towards 175.50. Until the cross close above 178.20, near-term bearish view remains in play. We recommend buying above 178.40 with targets at 178.60 and 179.20.
Trade: Selling below 177.00.
The material has been provided by InstaForex Company – www.instaforex.com