USD/JPY: a poor dollar helps the pair to decrease 27 January 2021, 11:04

USD/JPY: a poor dollar helps the pair to decrease

27 January 2021, 11:04

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	103.55
Take Profit	103.00
Stop Loss	103.80
Key Levels	103.00, 103.55, 103.84, 104.50

Alternative scenario
Recommendation	BUY STOP
Entry Point	103.84
Take Profit	104.50
Stop Loss	103.50
Key Levels	103.00, 103.55, 103.84, 104.50

Current trend

The USD/JPY pair reversed and declined, trading at the level of 103.70.

The Japanese currency is slightly winning back losses. Yesterday, the Economic revitalization minister Yasutoshi Nishimura, responsible for the fight against COVID-19, said that the government could extend the current quarantine for an indefinite period. The decline in incidence is too slow, although current measures have helped reduce the rate of spread of the disease.

The American currency is traded practically without volume. The USD index has been moving around the level of 90.200 for a long time. The fundamental background reflects decline rather than growth. Negotiations on a new support package have yet to begin, and members of the House of Representatives have submitted a new resolution to the Senate to impeach Donald Trump. Now, officials are demanding that Trump be banned from holding any political office in the United States for life.

Support and resistance

Locally, the price, having reached the resistance line of the global downwards channel, forms a local downwards channel. Technical indicators being ready for a reversal, start to change their readings to downwards ones. Fast EMAs of the Alligator indicator crossed again with the signal one, and the AO oscillator histogram moved into the sell zone.

Resistance levels: 103.84, 104.50.

Support levels: 103.55, 103.00.

Trading tips

After decline or consolidation below the local support at 103.55, sell positions with the target at 103.00 are relevant. Stop loss is 103.80, above the current price. Implementation period: 3 days.

After corrective growth or consolidation above the resistance level at 103.84, buy positions with the target at the resistance level of 104.50 are relevant. Stop loss is 103.50.