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USD/JPY: General analysis

Current trend 

On the daily chart the pair USD/JPY is trading at resistance level of 3/8 Murray, which coincides with the level of 102.34. Following the release of the positive data on US unemployment rate, which amounted to 6.3%, the USD got a chance to continue to strengthen against the Yen. Note that difference in the monetary policies of the USA and Japan can be beneficial for the USD. If the USA has chosen the policy of reduction of the quantitative easing program, Japan, on the contrary, increases quantitative easing programs, aiming to overcome deflation and lowering exchange rate of the national currency. The Bank of Japan has been successful in achieving the latter of the tasks: the Yen has lost 865 points since September last year. Weakening in the Yen has a positive effect on economy, increasing competiveness of Japanese products. For example, recent report of Canon showed that net profit in the Company has grown by 16% or 47.6 billion yen although sales of company’s product has declined in 2014. If monetary authorities continue existing policy, the USD will continue to strengthen against the Yen but in a slower rate than in 2013.

Levels of support and resistance

The nearest resistance level: 102.34 – Murray level of 3/8.

Support level is 101.56 – Murray level of 2/8.

Trading tips 

It is advisable to open long positions after breakdown of the level of 102.34 with stop-loss at 101.80 and a target of 103.91.


Dmitry Agurbash

Analysts of LiteForex Investments Limited

Monday, 05 May, 2014 / 9:36

Source :

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