Review and dynamics
The pair USD/JPY continues upward correction after the decline caused by the decision of the Bank of Japan to leave monetary policy unchanged.

Within two days after this decision the pair fell by over 500 points, declining to the annual lows at the level of 105.50.

On Monday, the pair USD/JPY has accelerated growth in the upward correction, which has been ongoing since the beginning of May, when Japanese Finance Minister Taro Aso confirmed that the Bank of Japan was ready to carry out intervention into the currency market. The pair closely approached strong resistance level of 108.90 (ЕМА144 and upper limit of the descending channel on 4-hour chart) and 109.50 (ЕМА200).

Our opinion
The pair has been declining in the descending channel on the weekly chart with the lower limit at the level of 106.20 and on the daily chart with the lower limit at the level of 105.00. Strong support level (ЕМА200 on the monthly chart) is slightly below the level of 104.50.

It is likely that the pair will continue to move in the range of 106.00 and 110.00 in anticipation of the strong fundamental drivers, such as monetary policy decisions by the US Fed and the Bank of Japan, unless the Bank of Japan carries out intervention on the currency market.

In case of break out of resistance level of 109.50 (ЕМА200 on 4-hour chart), the pair will go up to 110.40 (upper limit of the descending channel on the daily chart) and 110.80 (ЕМА144 on the weekly chart and Fibonacci 23.6% to the decline in the pair since June 2015 from the level of 125.65).

Sales in the pair may take place at the levels of 110.00 and 110.80, which will prevent further rise in the pair.

If the price breaks out the level of 110.80 the pair may go up to 113.65 (Fibonacci 38.2%) and 114.40 (ЕМА144 on the daily chart).

On 4-hour and daily charts the indicators OsMA and Stochastic give buy signals; on the weekly and monthly charts the indicators are in favor of seller. Consolidation of the price below the level of 108.00 may trigger further decline in the pair.

Support levels: 108.00, 107.45 and 106.20.
Resistance levels: 108.90, 109.50, 110.00, 110.40, 110.80, 112.00, 113.00, 113.65 and 114.40.

Trading tips
Buy Stop: 109.10. Stop Loss: 108.60. Take-Profit: 109.50, 110.00, 110.40, 110.80, 112.00, 113.00, 113.65 and 114.40.
Sell Stop: 108.35. Stop Loss: 108.90. Take-Profit: 107.45, 107.00, 106.70, 106.20, 105.00 and 104.50.

In the descending channel
In the descending channel

At the strong resistance level of 108.90
At the strong resistance level of 108.90

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