Current trend

On Friday, the USD/JPY pair started declining after a yesterday's growth, when it gained support from Jobless Claims statistics, released in the US, and the results of the ECB meeting. The European Regulator is likely to expand its quantitative easing programme in the short term.

Today, the JPY is strengthening amid the publication of Nomura/ JMMA Manufacturing Purchasing Manager Index for Japan. According to preliminary data, the indicator grew from 51 to 52.5 points, while a decline to 50.6 points was expected.

Support and resistance

Bollinger Bands indicator on the daily chart is still directed horizontally. The price range is widening, but its upper border, however, was broken out. MACD is growing and keeping a buy signal. Stochastic has reached the overbought zone and is turning down.

The indicators recommend waiting for clearer trading signals.

Support levels: 120.56, 120.34, 120.00, 119.62 (22 October low), 119.39, 119.05, 118.67, 118.24, 118.00.

Resistance levels: 121.00, 121.23 (25 September high), 121.73 (28 August high), 122.00, 122.60.

Trading tips

Short positions can be opened after the breakdown of the level of 120.00 with targets at 119.65, 119.35 and stop-loss at 120.10.

If the price turns up and consolidates above the level of 120.50, long positions will become valid with targets at 120.80, 121.00 and stop-loss at 120.30.

USD/JPY: correction started

USD/JPY: correction started

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