2016-07-27 12:28:58

Review and dynamics
After the statements made of Japanese Prime Minister Mr. Shinzo Abe' about introduction of the new economic stimulus program for 28 trillion yen, the Yen fell sharply in the market, while the pair USD/JPY soared up to 106.50. However, later the pair fell and at the beginning of the European session was at the resistance level of 105.60 (ЕМА50 on the daily chart and Fibonacci 23.6% to the decrease since June 2015 from the level of 125.65).

On the daily and weekly charts the pair is in the descending channels, while on the weekly chart technical indicators have reversed towards the long positions.

On 4- hour chart the price is in the ascending channel with the upper limit at the level of 109.00 and above support level of 105.00 (ЕМА200), the indicators OsMA and Stochastic give signals for long positions.

The pair consolidated above the key support levels on the monthly chart (ЕМА200, ЕМА144), which cross the level of 104.00.

Our opinion
If the pair will maintains the level above 104.00 and 105.00 before interest rate decision by the Bank of Japan on Friday at (02:00 GMT), the rise in the pair it is likely to continue.

Medium term rise in the pair USD/JPY is possible after break down of the resistance levels of 106.50 and 107.35 (highs of July) and 107.90 (ЕМА200 on the weekly chart).

The rise in the pair above the level of 110.10 (ЕМА144 on daily and weekly charts, Fibonacci 38.2) can trigger further growth in the pair USD/JPY up to levels of 111.25 (ЕМА200 on the daily chart) and 113.00 (Fibonacci 50.0%).

Anyway, further movement in the pair will largely depend on the decisions by the bank of Japan and the US Fed, investors risk appetite and optimism on the world financial markets.

The yen and gold remains are still safe-haven assets amid the ongoing instability in global financial markets.

Alternative scenario suggests that the pair USD/JPY will break down support level of 104.00 and go below the level of 100.60 in the descending channels on the daily and weekly charts with the lower limit at the level of 95.00.

Support levels: 105.00, 104.40, 104.00, 103.60, 102.60, 102.00, 101.50, 101.00 and 100.60.
Resistance levels: 105.60, 106.50, 107.35, 107.90, 110.10 and 111.25.

Trading tips
Buy Stop: 106.10. Stop Loss: 105.50. Take-Profit: 106.50, 107.35, 107.90, 108.50 and 110.10.
Sell Stop: 104.90. Stop Loss: 105.40. Take-Profit: 104.40, 104.00, 103.60, 102.60, 102.00, 101.50, 101.00 and 100.60.

Indicators give signals to buy
Indicators give signals to buy

Resistance level of 105.60
Resistance level of 105.60