Current trend

The significant USD growth against JPY in April and in the first half of May changed to a long downwards correction. In a few days, the pair lost more than 300 points and reached the support level of 108.15, despite the strong USD positions. The main catalyst was data from the Bank of Japan, which received approval to abandon the timeframe to achieve the inflation target, which means that in future the regulator will not target to maintaining the aggressive mitigation policy. However, the pair stopped at a key support level and could not go lower. In the medium term, this fall should be considered as a long correction, after which the upward trend will resume.

Today and tomorrow a block of key US releases, that can support USD additionally (Initial Jobless Claims, Unemployment Rate, and Nonfarm Payrolls), will be published.

Support and resistance

In the medium term, the upward trend will develop to the levels of 111.75, 112.00. USD will continue to grow due to positive main US economy sectors statistics. On the daily chart, technical indicators support the forecast: the growth of MACD long positions’ volumes restored, Bollinger bands are directed upwards.

Resistance levels: 109.00, 109.55, 109.85, 110.50, 111.00, 111.50, 111.75, 112.00.

Support levels: 108.45, 108.15, 107.75, 107.30, 106.80, 106.10.

Trading tips

It is relevant to increase the volumes of long positions from the current level with the targets at 111.75, 112.00 and stop loss 107.40.

US Dollar vs Japanese Yen

BuySellSpread
112.53112.49931

Scenario

TimeframeWeekly
RecommendationsBUY
Entry Point108.90
Take Profit111.75, 112.00
Stop Loss107.40
Support levels106.10, 106.80, 107.30, 107.75, 108.15, 108.45, 109.00, 109.55, 109.85, 110.50, 111.00, 111.50, 111.75, 112.00
USD/JPY: the upward trend restores

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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