Yesterday, the USD declined against its major counterparts amid weak Retail Sales and Production Prices Index statistics, released in the US. A decline in the USD/JPY pair continued today: the US currency lost more than 60 points.
Market participants are becoming more confident that US interest rates will remain unchanged in October. Moreover, weak macroeconomic data gives grounds to suggest that the Fed will delay a rate increase into at least spring 2016.
At the same time, today, the pair may be pushed further down in case of negative US Consumer Price Index statistics.
Support and resistance
The USD/JPY pair has approached the level of February lows at 117.00. Strong support level of 118.00 (EMA50 on the weekly chart) prevents the pair form further fall.
OsMA and Stochastic indicators on all charts, from the 4-hour to monthly, recommend short positions.
Support levels: 117.00, 117.40, 118.00, 118.40, 118.65.
Resistance levels: 119.60, 120.00.
Short positions can be opened below the level of 118.30 with targets at 117.40, 117.00 and stop-loss at 118.50.
Long positions would become valid if the price turns up and reaches the level of 118.70 with targets at 119.20, 119.60 and stop-loss at 118.40.