USD/JPY: the dollar is strengthening
18 January 2019, 09:06
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 109.75, 110.05 |
| Take Profit | 111.00, 111.50 |
| Stop Loss | 109.40, 109.10 |
| Key Levels | 107.47, 108.00, 108.58, 109.07, 109.45, 110.00, 110.45, 111.00 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 108.95, 108.65 |
| Take Profit | 108.00, 107.80 |
| Stop Loss | 109.30, 109.50 |
| Key Levels | 107.47, 108.00, 108.58, 109.07, 109.45, 110.00, 110.45, 111.00 |
Current trend
USD grows moderately against JPY, renewing local highs since January 2, 2018.
Yesterday, investors were focused on the speech of the head of the Bank of Japan Haruhiko Kuroda. He noted that central banks should carefully assess the impact on the economy of unconventional monetary policy measures since they can cause various side effects. Kuroda also mentioned that rapidly aging societies, including Japan, may complicate the work of banks since reducing the demand for their services may induce financial institutions to encourage risky investments.
Today, during the Asian session, the pair is strengthening due to poor macroeconomic statistics from Japan. In December, the national Consumer Price Index slowed down from +0.8% YoY to +0.3% YoY. CPI excluding prices for fresh food fell from +0.9% YoY to +0.7% YoY, while the growth by 0.8% YoY was expected.
Support and resistance
On the daily chart, Bollinger bands reverse horizontally. The price range narrows, reflecting the emergence of an upward trend in the short term. MACD is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic is directed upwards but is near its highs, which indicates that USD can become overbought in the super short term.
It is better to keep current long positions until the market situation becomes clear.
Resistance levels: 109.45, 110.00, 110.45, 111.00.
Support levels: 109.07, 108.58, 108.00, 107.47.
Trading tips
Long positions can be opened after the breakout of the level of 109.70 or 110.00 with the targets at 111.00–111.50. Stop loss is 109.40–109.10.
Short positions can be opened after a downward reversal near current levels and a breakdown of the level of 109.00 or 108.70 with the target at 108.00 or 107.80. Stop loss is 109.30–109.50.
Implementation period: 2–3 days.
USD grows moderately against JPY, renewing local highs since January 2, 2018.
Yesterday, investors were focused on the speech of the head of the Bank of Japan Haruhiko Kuroda. He noted that central banks should carefully assess the impact on the economy of unconventional monetary policy measures since they can cause various side effects. Kuroda also mentioned that rapidly aging societies, including Japan, may complicate the work of banks since reducing the demand for their services may induce financial institutions to encourage risky investments.
Today, during the Asian session, the pair is strengthening due to poor macroeconomic statistics from Japan. In December, the national Consumer Price Index slowed down from +0.8% YoY to +0.3% YoY. CPI excluding prices for fresh food fell from +0.9% YoY to +0.7% YoY, while the growth by 0.8% YoY was expected.
Support and resistance
On the daily chart, Bollinger bands reverse horizontally. The price range narrows, reflecting the emergence of an upward trend in the short term. MACD is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic is directed upwards but is near its highs, which indicates that USD can become overbought in the super short term.
It is better to keep current long positions until the market situation becomes clear.
Resistance levels: 109.45, 110.00, 110.45, 111.00.
Support levels: 109.07, 108.58, 108.00, 107.47.
Trading tips
Long positions can be opened after the breakout of the level of 109.70 or 110.00 with the targets at 111.00–111.50. Stop loss is 109.40–109.10.
Short positions can be opened after a downward reversal near current levels and a breakdown of the level of 109.00 or 108.70 with the target at 108.00 or 107.80. Stop loss is 109.30–109.50.
Implementation period: 2–3 days.
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