USD/JPY: dollar drops sharply

Current dynamics

The US dollar fell sharply against the Japanese yen amid the worsening geopolitical situation around the DPRK, after Kim Jong-un’s sharp statements in response to Donald Trump’s threats to destroy DPRK.

On the other hand, the development of a more confident decline was hampered by soft protocols of the Bank of Japan, published on Thursday. As expected, the Japanese regulator left the monetary policy unchanged, and investors’ attention was attracted to the statements of a new member of the Central Bank’s board about the need for additional incentives to achieve target inflation levels.

Support and resistance

Bollinger Bands on the daily chart shows a steady growth. The price range slightly decreases at the bottom, reacting to the “bearish” nature of trading in the morning session. In the short term, a correction may be formed.

The MACD indicator turns downwards, keeping the previous buy signal (the histogram is located above the signal line). It is better to wait for the formation of a signal to sell.

Stochastics is going to leave the overbought area with a sell signal. The indicator does not contradict the development of “bearish” dynamics in the short term.

Resistance levels: 112.00, 112.36, 112.70.

Support levels: 111.64, 111.27, 111.00, 110.71.

Trading tips

To open long positions, you can rely on the reverse near the level of 111.00. Take profit – 112.00–112.36. Stop loss – 110.30. Term of realization: 2 days.

More likely a correction is going to develop and the price will break down the level of 111.00. The goal of the “bears” in this case may be the level of 110.00. Stop loss is 111.50. Term of realization: 2-3 days.