USD/JPY: the dollar remains under pressure

Current trend

Last week, favorable data on the US labor market and orders for durable goods supported the dollar, but preliminary data on the economic growth rates for the fourth quarter came out below the already weak forecasts. At the beginning of the current trading week, the pair switched to the consolidation stage and is trading in a narrow sideways channel. The main catalyst for the fall of the US currency is the negative fundamental background and the prolongation of further tightening of monetary policy. Despite a significant fall in the dollar, the Ministry of Finance will not take any measures to stimulate the currency.

Key releases will be published in the second half of the week, special attention should be paid to the construction sector of Japan, USA will respond with data on the labor market and production orders.

Support and resistance

The pair remains in the long-term downward channel, which increases the pressure on the dollar. Technical indicators confirm the decline forecast: MACD indicates the high volume of short positions, the Bollinger bands are directed downwards.

Support levels: 108.15, 107.75, 107.30, 107.00, 106.50, 106.10, 105.00, 104.70.

Resistance levels: 109.00, 109.55, 110.55, 111.00, 111.50, 111.75.

Trading tips

Short positions can be opened at the current level and pending sell orders can be placed at the levels of 109.00, 109.85 with the target of 107.30 and stop loss at 110.20.

US Dollar vs Japanese Yen

Buy Sell Spread
108.685 108.661 24

Scenario

Timeframe Weekly
Recommendations SELL
Entry Point 108.61
Take Profit 107.30
Stop Loss 109.80
Support levels 104.70, 105.00, 106.10, 106.50, 107.00, 107.30, 107.75, 108.15, 109.00, 109.55, 110.55, 111.00, 111.50, 111.75

Alternative scenario

Recommendations SELL LIMIT
Entry Point 109.00, 109.85
Take Profit 107.30
Stop Loss 110.20
Support levels 104.70, 105.00, 106.10, 106.50, 107.00, 107.30, 107.75, 108.15, 109.00, 109.55, 110.55, 111.00, 111.50, 111.75

USD/JPY: the dollar remains under pressure

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