USD/JPY: USD remains under pressure 21 January 2021, 10:55

USD/JPY: USD remains under pressure

21 January 2021, 10:55

Scenario
Timeframe	Intraday
Recommendation	SELL STOP
Entry Point	103.20
Take Profit	102.80
Stop Loss	103.50
Key Levels	102.50, 102.80, 103.00, 103.25, 103.60, 103.90, 104.20, 104.50

Alternative scenario
Recommendation	BUY STOP
Entry Point	103.65
Take Profit	103.90, 104.00
Stop Loss	103.35
Key Levels	102.50, 102.80, 103.00, 103.25, 103.60, 103.90, 104.20, 104.50

Current trend

USD continues to show a downtrend against JPY during today's Asian session, updating local lows since January 7. The positions of USD remain under pressure after Janet Yellen's speech in the Senate earlier this week. Investors expect a prolonged period of low interest rates to continue with an accompanying sharp increase in government spending, which can already be seen from Joe Biden's first decrees. The new US president also announced a program to support the American economy for almost USD 2 trillion, which, in addition to new direct payments to households, provides for an increase in the minimum wage and unemployment benefits.

Japanese investors today are taking a lead from the decision of the Bank of Japan to keep the key interest rate at –0.1%.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting ambiguous nature of trading in the short term. MACD is going down keeping a fairly stable sell signal (located below the signal line). Stochastic demonstrates similar dynamics but its line is already approaching its lows, pointing at risks of oversold USD in the ultra-short term.

To open new positions, it is necessary to wait for the trade signals to become clear.

Resistance levels: 103.60, 103.90, 104.20, 104.50.

Support levels: 103.25, 103.00, 102.80, 102.50.

Trading tips

To open new short positions, one can rely on the breakdown of 103.25. Take-profit – 102.80. Stop-loss – 103.50. Implementation time: 1-2 days.

A rebound from 103.25 as from support followed by a breakout of 103.60 may become a signal to return to purchases with the targets at 103.90–104.00. Stop-loss – 103.35.