USD/JPY: the upward impulse may remain

Current trend

Since the middle of October the pair USD/JPY has gained over 250 points and consolidated near the key resistance level of 114.50. The main growth catalyst was strong fundamental background in the USA that have USD considerable investor support.

Despite the release of strong data on the main Japanese sectors, yen failed to remain at its positions. The pair continues to trade within the medium-term upward channel which may indicate the preservation of the upward impulse. Yesterday’s fall of EUR and GBP gave the rate of the pair additional support due to the outflow of assets to USD. Today the pair continues to follow the growth impulse, but is not so rapid. US GDP data may enforce the tendency or change it (forecasts indicate the fall of US economic growth rate in Q3). Generally, the confirmation of the forecast or values a bit higher than expected will support the rate of USD/JPY. Otherwise, the pair will be under pressure.

Today special attention should be paid to the data on US economic growth rate.

Support and resistance

On the D1 chart technical indicators show the preservation of the upward trend. Bollinger Bands are directed upwards. The volumes of MACD histogram are growing in the positive zone forming a buy signal. The main scenario is the strengthening of USD against yen in the medium term and the testing of local maximums of July and March 2017 at 114.50, 115.50.

Support levels: 114.00, 113.70, 113.45, 113.25, 112.85, 112.60, 112.40, 111.75, 111.00, 110.50, 109.00.

Resistance levels: 114.35, 114.50, 115.00, 115.50, 116.30, 116.70.

Trading tips

In this situation long positions may be opened from the current level with target at 115.50 and stop-loss at 113.10.