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.
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
|Take Profit||111.75, 112.00|
|Support levels||106.10, 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|
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