The stronger US data have dominated in the recent weeks. The pair is trading at 109.41 near the resistance level of 110.66. Today the US data will provide enough support to breach the near resistance for further increase towards 112 and 114.70 in the near term. Japan will release key data: retail sales, household spending and prelim industrial production. On the higher side, 114.70 is the 80.0 fib level from 124 levels in June 2007 to 75.57 in October 2011. The pair has support at 106.50 200MSma on a closing basis. On the US dollar front, as we recommended earlier, in case of a breach above the $85 mark, the yen is expected to tick down towards 114, 118, 120, and 123 in the longer time frames. We mentioned the same probability in December 2013 when this pair was trading around 99). Again, we recommended 101 levels on July 11, 2014. This pair is on a verge of another breakout in the monthly chart. Today is the last trading day in this month and the quarter. Today's closing will give further direction.
A close above the trend line adds a further bullish sign towards 120-123- pending
For an intraday view, the pair is facing strong resistance at 35DEMA. We recommend buying above 109.50. The pair has support at 109.30, 109.10 and 109. We expect some weakness only below 109 towards 108.50 and 108.25. Use a dip to buy.
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