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Technical Analysis USDJPY 6 October 2014

USD/JPY 6 October 2014 H4

USD/JPY 6 October 2014 H4

NonFarm Resolves Uncertainty

The monthly key US macroeconomic indicator Non-Farm Employment Change was released on Friday. The index is published by the US Department of Labor and shows the number of new jobs in the agricultural sector over the past month. The index change has a significant impact on the consumer spending and the US investment appeal. It is also important to note that Non-Farm indicator is published one of the first in the current month and has a long-term impact on the market (up to one week). The current indicator performance was higher 40%(!) than the previous month and above the forecasted 15% (248K/216K/180K), and that certainly indicates the US economy recovery. It increased the attractiveness of the US dollar for investors. This week we expect the trend continuation of USD strengthening against other liquid currencies.

Here we consider the USD/JPY behavior on the H4 chart. The price reversed in the direction of the green zone near the H4 trend line and continued to move within the trend channel. The dynamic support is confirmed by Parabolic SAR historical values and Donchian Channel lower boundary. We expect the final confirmation of the bullish sentiment on the part of the RSI-Bars oscillator, which would probably cross the resistance at 64.7242%. In our opinion, it will happen at the same time with the resistance breach at 110,097. This mark can be used to open a pending buy order, with Stop Loss being placed below the fractal at 107,921.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal trough. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 110.097
Stop loss below 107.921

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