Is USD/JPY buy, buy, buy?

Since the start of 2011, USD/JPY has appreciated from the 81 figure towards 83.60 before pulling back to current levels. This short-term pullback may be an opportunity to get long if you’ve missed out. FOREX.com’s proprietary interest rate and equity models suggest fair value for USD/JPY is between 88-90, which is approximately 500-700 pips from where it’s currently trading (see Bloomberg chart). Now, this doesn’t mean it has to reach such levels, however it does suggest the downside is limited relative to interest rates and equity market valuations between the United States and Japan. Additionally, the short-term technical landscape looks ripe for a breakout. USD/JPY has reached the 38.2% retracement (from 1/2 low to 1/7 high) around 82.65, as well as found support at the 144 & 169 hourly EMA’s (see chart - in blue). A further pullback, while not preferred, towards 82.10/20 could also be view and an area to establish a bullish bias. Meanwhile, a break back below the 2011 lows near 81.00 would signal it’s time to bail.


Chart Source: Bloomberg

KEY TECHNICAL LEVELS:

* Short-term Trendline Resistance at 83.05 (in black)
* Key Topside pivot 83.60 (prior high)
* Hourly 144 & 169 EMA’s = 82.70/75
* 38.2% Retracement = 82.60/65
* January 4th high (now support) = 82.25

по материалам Forex.Com

11.01.2011