USD/JPY: general review
09 December 2019, 12:09
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 108.50 |
| Take Profit | 107.90 |
| Stop Loss | 108.80 |
| Key Levels | 107.90, 108.40, 108.80, 109.70 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 108.80 |
| Take Profit | 109.70 |
| Stop Loss | 108.50 |
| Key Levels | 107.90, 108.40, 108.80, 109.70 |
Current trend
The main driver that determined the direction of the movement of the pair for this and the next week was the statement by the board member of the Bank of Japan Yutaka Harada. Investors were alarmed by the statement that the regulator would not take additional steps to the plan to stimulate the economy and increase the rate of quantitative easing. The stimulating plan provides for an injection of 26 trillion yen, including fiscal expenses of 13.2 trillion yen.
Weak statistics also added negative sentiment. Household Spending in October showed a decrease of 11.5% compared to +5.5% in the previous month. Services PMI also turned out to be worse than the forecast: 50.3 points against the expected 50.4 points.
As a result, the instrument can continue to move in an uptrend only on the condition that the US dollar stops its already protracted decline.
Support and resistance
The price continues to hold inside the global Triangle pattern. The asset spent the past week trying to break through the support line, but so far these attempts have not been successful. The Alligator indicator is pointing down and appears to be showing signs of signal amplification.
Resistance levels: 108.80, 109.70.
Support levels: 108.40, 107.90.
Trading tips
If the asset reverses and continues growing, and the price consolidates above the local high at 108.80, buy positions opened earlier will be relevant with target at 109.70. It is advisable to place the stop loss below the local low at around 108.50.
If the asset declines and the price consolidates below the local low and the support line at 108.50, short positions can be opened with the target at 107.90. Stop loss should be placed beyond the local high, at 108.80.
Implementation time: 7 days and more.
The main driver that determined the direction of the movement of the pair for this and the next week was the statement by the board member of the Bank of Japan Yutaka Harada. Investors were alarmed by the statement that the regulator would not take additional steps to the plan to stimulate the economy and increase the rate of quantitative easing. The stimulating plan provides for an injection of 26 trillion yen, including fiscal expenses of 13.2 trillion yen.
Weak statistics also added negative sentiment. Household Spending in October showed a decrease of 11.5% compared to +5.5% in the previous month. Services PMI also turned out to be worse than the forecast: 50.3 points against the expected 50.4 points.
As a result, the instrument can continue to move in an uptrend only on the condition that the US dollar stops its already protracted decline.
Support and resistance
The price continues to hold inside the global Triangle pattern. The asset spent the past week trying to break through the support line, but so far these attempts have not been successful. The Alligator indicator is pointing down and appears to be showing signs of signal amplification.
Resistance levels: 108.80, 109.70.
Support levels: 108.40, 107.90.
Trading tips
If the asset reverses and continues growing, and the price consolidates above the local high at 108.80, buy positions opened earlier will be relevant with target at 109.70. It is advisable to place the stop loss below the local low at around 108.50.
If the asset declines and the price consolidates below the local low and the support line at 108.50, short positions can be opened with the target at 107.90. Stop loss should be placed beyond the local high, at 108.80.
Implementation time: 7 days and more.
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