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JPYINR – Technical trend analysis 12july2013

, July 15, 2013, 0 Comments

Federal Reserve chairman Ben S Bernanke has hinted  that the economy may still require stimulus to bolster growth, that may lead to a rally in weak  foreign currencies, especially  in the emerging markets. Bank of Japan has refrained from adding additional stimulus, yet yen rose not only against major currencies but signaled a strong uptrend in JPYINR.

Chart Structure: JPYINR made higher highs at 69.85 and then on again at 72.26. But at 72.26 prices JPYINR faced stiff resistance 4 times. JPYINR prices on such strong resistance collapsed all the way down to 53.50.

Price Pattern: A smaller price pattern of the flag can be observed in the daily chart of JPYINR. This  bullish flag can be identified as part of  a continuation pattern. The daily trend is up since bottoming out at the low of 53.50. Breakout from this bullish flag can be anticipated on the upside. The post pattern breakout target will be 63-67after crossing 62.50 decisively.

Moving Average: 200dma is broader trend following decisively within daily time frames and is also acting as resistance to daily JPYINR prices. Post flag breakout JPYINR prices may take support on this 200dma.

Technical Momentum Indicator:
The slow stochastic level is currently at 70 after having touched & gone above 100 in the deep oversold zone. Slow stochastic at 70 is an excellent entry point for a long trader, as we have seen decisive upward move in JPYINR price..

 

Technical Conclusion: No clear Bullish & Bearish structure is being observed in the daily time frame chart. But technically in JPYINR currency pair daily trend is up and thus bullish positions can be profitable. On crossing 200dma at 62.50 bulls may become more active.

Invest Or Not To Invest: A trader may invest/trade with an adequate stop loss and trailing stop loss. Stop loss may be 59.89/60.12 at the trade entry point and further trailing stop loss levels can be just below the weekly close price in JPYINR.
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About author
Suchita holds a Bachelor of Science Degree from MSU University, Baroda, Diploma in Financial Management from Xavier's Institute of Management, Mumbai and has undergone Comprehensive Program on Technicals Analysis from Bombay stock exchange. ...more