Review and dynamics
At today’s Asian session the Yen was on sale amid positive Chinese statistics. At the end of last week the price reached the lows of 2013-2014 at the level of 100.60. This trading week the pair started to go up, gaining almost 600 points and closely approaching the level of 106.50 (Fibonacci 23.6% to the decline in the pair since June 2015 from the level of 125.65).
Plans of the Japanese Prime-Minister to introduce tough measure in order to reverse deflation and prevent the rise in the Yen has triggered sale in the Yen and support the rise in Japanese stocks. Although the pair is in the descending channel on the daily and weekly charts, technical indicators give signals for long positions. The pair has broken down resistance level of 105.60 (ЕМА50 and upper ling of the descending channel on the daily chart). The pair also consolidated above the key support levels on the monthly chart (ЕМА200, ЕМА144, which are crossing the levels of 104.40 and 103.60 respectively).
It is possible that the pair will continue to rise. In cease of breakout of the resistance level 106.50 (upper line of the ascending channel on 4-hour chart and Fibonacci 23.6%), the pair may go to 107.90 (ЕМА200 on the weekly chart) and 110.10. On the weekly chart the upper line of the descending channel is between these resistance levels. The rise in price above the level of 110.10 (ЕМА144 on the daily and weekly charts, Fibonacci 38.2%) may trigger further rise up to 111.70 (ЕМА200 on the daily chart) and 113.00 (Fibonacci 50.0%).
Movement direction in the pair will largely depend on the actions and comments by the Bank of Japan and the US Fed, on the investors’ risk appetite and also on the optimism in the global market. The Yen and gold are still considered safe-haven assets amid continuing instability if the world financial markets.
Support levels: 105.60, 105.00, 104.40, 103.60, 102.60, 102.00, 101.50, 101.00 and 100.60.
Resistance levels: 106.50, 107.90, 110.10 and 111.70.
Buy Stop: 106.10. Stop Loss: 105.50. Take-Profit: 106.50, 107.00, 107.90, 108.50 and 110.10.
Sell Stop: 105.40. Stop Loss: 105.90. Take-Profit: 105.00, 104.40, 103.60, 102.60, 102.00, 101.50, 101.00 and 100.60.
In the descending channel
Breakout of the level of 105.60