Current trend

USD against JPY is trading within the upward trend but fell to the lower border of the channel.

At the last trading week and at the beginning of the current one, the pair lost more than 200 points and reached the level of 111.00. After unsuccessful attempts to break the lower border of the ascending channel, the instrument consolidated above the level of 111.00. The main fall catalyst was the investor demand for USD decline due to the poor construction sector, major indices and the housing market releases. A change in trading moods and the closing of a high volume of long positions at local highs affected the instrument negatively.

At the end of the current trading week, the US will release a number of key data: economy growth rate, Durable Goods Orders and labor market statistics. Consensus forecasts indicate a rapid acceleration in the growth rate of the US economy, which will strengthen USD.

Support and resistance

The pair is in an uptrend, and the probability of a reversal is very small. The instrument can begin to grow from the current level to new local highs. An alternative scenario is the formation of a slighter channel, a decrease to the levels of 110.50, 110.20 and growth thereafter. Technical indicators confirm the forecast, MACD keeps high volumes of long positions, and Bollinger bands are directed upwards.

Resistance levels: 111.40, 111.50, 111.75, 112.00, 112.85, 113.25.

Support levels: 111.00, 110.85, 110.50, 110.20, 110.00, 109.55.

Trading tips

It is relevant to increase the volumes long positions from the current level and open pending long positions from the levels 110.50, 110.20 with the targets at 113.70, 114.00 and stop loss 109.85.

US Dollar vs Japanese Yen

BuySellSpread
110.908110.88622

Scenario

TimeframeWeekly
RecommendationsBUY
Entry Point111.10
Take Profit113.70, 114.00
Stop Loss109.85
Support levels109.55, 110.00, 110.20, 110.50, 110.85, 111.00, 111.40, 111.50, 111.75, 112.00, 112.85, 113.25

Alternative scenario

RecommendationsBUY LIMIT
Entry Point110.50, 110.20
Take Profit113.70, 114.00
Stop Loss109.85
Support levels109.55, 110.00, 110.20, 110.50, 110.85, 111.00, 111.40, 111.50, 111.75, 112.00, 112.85, 113.25
USD/JPY: dollar will grow

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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