After significant growth in September and early October, the USD/JPY pair is now decreasing. In the middle of the last trading week, the instrument reached a key resistance level of 114.50, which is also the upper border of the medium-term upward channel, reversed and began to fall rapidly due to trading moods, which decreased the price to the levels of 113.70 and 113.50. Subsequently, ambiguous US labor market data were published: the Unemployment Rate fell to 3.7% against the expected 3.8%, but Nonfarm Payrolls fell above forecasts to 134K. Today, the dollar began to lose demand, in a few hours the pair went more than 60 points downwards and reached the level of 113.25.
There is a lack of key economic releases now, and the pair will move due to the trading moods. In the second half of the week, traders will focus on US inflation data, the labor market statistics and key indices. In Japan, Machinery and Machine Tool Orders will be released.
Support and resistance
In the short term, the downward momentum will develop to the support levels of 113.15, 113.00 and 112.85. Further, the formation of a new upward wave to the levels of 114.30 and 114.50 is expected, a testing of new highs is possible.
An alternative scenario is a consolidation below key support levels of 113.00, 112.85 and the movement to 111.75, 111.40.
Technical indicators confirm the growth forecast: MACD keeps a high volume of long positions, Bollinger bands are directed upwards.
Resistance levels: 113.70, 113.85, 114.00, 114.50, 115.00, 115.50.
Support levels: 113.15, 113.00, 112.85, 112.40, 112.00, 111.75, 111.40, 111.00.
It is relevant to increase the volumes of long positions from the current level with the targets at 114.50, 115.50 and stop loss 112.60.
US Dollar vs Japanese Yen
|Take Profit||114.50, 115.50|
|Support levels||111.00, 111.40, 111.75, 112.00, 112.40, 112.85, 113.00, 113.15, 113.70, 113.85, 114.00, 114.50, 115.00, 115.50|
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