In January, after significant decrease, the USD/JPY pair entered the wide sideways narrowing consolidation, as expected. During last two trading weeks, it either grew by 200 points, either fall to local lows in a day. The main catalyst of the pair’s movement was trading moods and weakening of US currency due to the negative fundamental background. In the end of the last week, the pair unsuccessfully tested the key support level of 108.15, after which returned to the sideways channel, where it is now trading.
Recently the volatility decreased due to lack of key economic releases in USA and Japan. All the main data will be published in the second half of the week. Inflation, retail sales, industrial production and employment market data from the USA are worth traders’ attention.
Support and resistance
The pair exit the long-term downward trend, so the current consolidation can reverse into growth. The formation of the upward trend and strengthening of USD due to positive macroeconomic American data and the growth of dollar’s investment attractiveness are expected. On the 4-hour chart, technical indicators are restructuring, MACD short positions’ volumes are going down, Bollinger Bands are reversing horizontally.
Resistance levels: 109.00, 109.55, 109.85, 110.50, 111.00, 111.50, 112.10.
Support levels: 108.45, 108.15, 107.50, 107.00, 106.30, 106.00, 105.70, 105.00.
Long positions can be opened at the current level with the targets at 111.00, 111.50 and short stop loss 107.90.
US Dollar vs Japanese Yen
|Take Profit||111.00, 111.50|
|Support levels||105.00, 105.70, 106.00, 106.30, 107.00, 107.50, 108.15, 108.45, 109.00, 109.55, 109.85, 110.50, 111.00, 111.50, 112.10|
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