Last week the USD/JPY pair could not show sustainable growth.
The pair was significantly supported after the Fed meeting, where the regulator decided to wait with monetary policy tightening but kept the door open for a possible move at its next meeting in December.
At the same time, the pair was pressured by poor preliminary GDP data for the third quarter of the year from the US and the Bank of Japan monetary policy meeting. The Japanese regulator kept its QE program unchanged at 80 trillion Yen a year and shifted dates for inflation to reach its target due to falling oil prices.
Support and resistance
Bollinger Bands on the daily chart continues growing, while the price range is narrowing. MACD is falling and giving a weak sell signal. Stochastic is also falling and reaching the oversold zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 120.34 (local low), 120.00 (28 October lows), 119.62 (22 October low), 119.39, 119.05, 118.67, 118.24, 118.00 (15 October lows).
Resistance levels: 120.56 (local high), 121.00, 121.23, 121.48 (26 and 30 October highs), 121.73, 122.00.
Long positions can be opened after the breakout of the level of 120.70 (with the appropriate indicators signals) with the target at 121.50 and stop-loss at 120.30. Validity – 1-3 days.
Short positions look preferable. These can be opened after the breakdown of the level of 120.10 with the target at 119.49 and stop-loss at 120.40. Validity – 1-3 days.