2016-09-16 14:30:15

Review and dynamics
Starting from the mid-June the pair USD/JPY has moved in the range of 106.50 (Fibonacci 23.6% after the decline in the pair from the level of 125.65 since June 2015) and 100.00 (annual lows). The level of 106.50 is being crossed by ЕМА144 on the daily chart. Two strong resistance levels 107.35 (ЕМА200 on the weekly chart) and 108.25 (ЕМА200 on the daily chart) are above the level of 106.50.

In the gap between the level of 100.00 and levels of 97.50, 94.15 (lows of June 2013 and the lower line of the descending channel on the weekly chart), there are no lines or fundamental factors preventing movement in the pair.

The short-term rise in the pair USD/JPY is prevented by the resistance levels of 102.30 (ЕМА200 on 4-hour chart), 102.85 (ЕМА50 and the upper line of the descending channel on the daily chart) and 104.20 (September highs).

The USD/JPY remains in the descending channel on the weekly chart with the lower limit near the level of 94.15 and below the key resistance level of 104.20 (ЕМА200 on the monthly chart).

Our opinion
On the 4 hour, daily and monthly charts the indicators OsMA and Stochastic give signals for short positions. The USD/JPY remains in the upper area of the strong descending channels on the daily and weekly charts. It is a favorable situation for opening short positions with the nearest target of 100.00. However, in anticipation of important events (meetings of the Central banks in the USA and Japan next week) traders will refrain from active actions. Trading volumes in the pair will not be high prior to these meetings.

Movement in the pair will depend on the decisions of the Central Banks; the pair may sharply go either up or down. Meanwhile the USD is slightly growing in the market, which can be caused by the closure of the short positions at the end of the trading week.

If the Bank of Japan and the US Fed again do not take decisive measures, the pair USD/JPY may break down the level of 100.00 and go to the bottom line of the channel on the daily chart at the level of 98.00 and further down in the descending channel on the weekly chart. Its bottom limit is near the level of 94.15.

As an alternative scenario the pair can break out resistance level of 104.20 and go up to the levels of 106.50 (Fibonacci 23.6% against the decline from 125.65 since June 2015) and 107.35 (ЕМА200 on the weekly chart).

The rise in the pair further up is unlikely.

Support levels: 102.00, 101.50, 100.60, 100.00, 99.00, 97.50 and 95.00.
Resistance levels: 102.30, 102.85, 103.50, 104.00, 104.20, 105.00, 106.50, 107.35 and 108.25.

Trading tips
Buy Stop: 103.20. Stop Loss: 102.75. Take-Profit: 103.50, 104.00, 104.20, 105.00, 106.50 and 107.35.
Sell on the market. Stop Loss: 102.50. Take-Profit: 101.50, 100.60, 100.00, 99.00, 97.50 and 95.00.

In the descending channel
In the descending channel

Breakout of support level of 102.30
Breakout of support level of 102.30