JPY: Japanese Yen consolidates at the trading volume above average

The Japanese Yen rate consolidates significantly at the Forex currency market, acting as a currency -“refuge” due to the developments in Egypt.

Forex forecast: MACD indicator is in the negative area for the pair USD/JPY and continues to go down, giving a pair sell signal, which is supported by considerable volumes. The level of such volumes has not been observed since the end of last year. Stochastic Oscillator has entered into the oversold zone which indicates the development of the descending trend with its subsequent weakening and changing.

Forex recommendations: if bearish sentiment will be maintained the pair will go to 81.25 and 80.90.

Downward trend was also confirmed on the weekly chart where according to the indicator Ichimoku the pair has been in the power of bears since 20 June last year. Potential of the descending movement is at the lows of the last year, at 80.25.

Japanese authorities continue to face the future with optimism, raising assessment of the industrial output as well on the basis of the growth rate of exports.

Thus, industrial output increased by 3.1% m/m in December against the growth by 1.0% m/m in November and the forecast of 2.9% m/m. Authorities of the Country of the Rising Sun expect that the index will rise by 5.7% in January, and will reduce by 1.7% in February. We would remind that export rate increased by 13.0% y/y last month.

It is not excluded that the demand abroad, in the USA and China, will encourage levels of exports in Japan to continue its growth and then production will get a support. At the moment it is obvious that Japan has come out of the state of stupor in regard to production, however it is still unclear if it will continue this momentum.

The existing situation in Egypt has urged many speculators avoid risks and the purchase of the Japanese national currency looks like the most informed decision. Technical analyses supports fundamental factors, showing that the largest sales in the pair took place simultaneously with the riots in Egypt and their volumes (sale volumes) continues to increase today.

 

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