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USD/JPY Signal - U.S. existing home sales - 21 Dec 2016

Signal details
Entry Price: 
117.50
Close Price: 
117.53
Direction: 
Low
Expiry Time: 
21:00 GMT
Result: 
OTM
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USDJPY rallied back yesterday after the BoJ left policy unchanged. The gains came on the back of a stronger U.S. dollar which pushed to fresh 14-year highs. Technically, USDJPY remains oversold near the 118.0 handle. Despite yesterday's rally, price failed to clear the 118.00 level which could signal a near term correction to the downside. Technical support at 114.00 remains a key level in this aspect.

On the economic front, today's existing home sales data from the U.S is expected to show an increase of 5.52 million, slightly lower than the 5.60 million in October. Last week, building permits and housing starts in the U.S. fell more than expected which could see a slowdown in the existing home sales data.

USDJPY's technical outlook shows the potential for a downside towards 114.00 on an intraday close below 117.50. This could potentially accelerate the declines to 114.00 support level which yet to be challenged after initially forming resistance at this level. The intraday charts also show a potential bearish divergence in prices validating the downside bias. Therefore, look to purchase daily PUTs near 117.50 for a 21:00 GMT expiry time.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.