Yesterday, the pair USD/JPY traded up in the range of 119.75-120.83. The Yen has weakened after the release of the negative statistics on the volume of orders for machine-building equipment in Japan; this index fell to 14.6% versus the previous value of 28.9%. Currently, the price is at the level of 120.50.
This afternoon US import price index will become known, as well as Federal budget execution report. Import prices index is the leading indicator of inflation and the forecast for it is not favourable. If this index falls to -0.4%, the Yen can regain lost positions.
Technical analysis shows that on the daily chart moving average lines with the periods of 20, 50 and 100 are below the price chart and directed upwards, which confirms current upward trend. The pair is traded above Iсhimoku cloud and also above the lines Tenkan-sen and Kijun-sen, which also confirms that the “bullish” trend will continue.
Support and resistance
The nearest resistance level is 120.80. At the end of last month the price tried to consolidate above this level, however after the failure, it sharply went down. If the above-mentioned level is broken down this week, the price can go to the next resistance level of 121.50 (last month lows). Support levels: 118.95 and 118.42 (MA 100).
It is recommended to open long positions at the current price with the target of 121.50. Pending sell orders can be placed at the same level with the exit points at 119.00.