USD/JPY: dollar remains under pressure 10 February 2021, 10:27

USD/JPY: dollar remains under pressure

10 February 2021, 10:27

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	104.80
Take Profit	105.16
Stop Loss	104.50
Key Levels	103.60, 103.90, 104.20, 104.50, 104.75, 105.00, 105.16, 105.33

Alternative scenario
Recommendation	SELL STOP
Entry Point	104.45
Take Profit	103.90
Stop Loss	104.85
Key Levels	103.60, 103.90, 104.20, 104.50, 104.75, 105.00, 105.16, 105.33

Current trend

Today during the Asian session, the USD/JPY pair is slightly strengthening, weakly compensating for the confident decline yesterday, caused by the negative sentiment of traders against the dollar.

American macroeconomic statistics are increasingly worse than experts' expectations. It shows that the US economy will take more time to recover than it was estimated earlier. It's worth noting that the US presidential administration has yet implemented its new $1.9 trillion stimulus program. Despite criticism of the new measures and opposition from the Republican Party, the aid package could give the US economy a strong upward momentum.

The data from Japan released on Wednesday did not have a noticeable impact on the instrument's dynamics. Thus, the producer price index of goods for January slowed down from +0.5% to +0.4% MoM, which coincided with market expectations. January index of domestic prices for corporate goods increased slightly from –2% to –1.6% YoY.

Support and resistance

Bollinger bands are actively growing on the daily chart. The price range is rapidly narrowing in response to a sharp change in trading direction in the short term. The MACD indicator reversed downwards and formed a new strong sell signal (the histogram is below the signal line). Stochastic shows a similar picture but is rapidly approaching its lows, indicating that USD may become oversold in the ultra-short term.

Resistance levels: 104.75, 105.00, 105.16, 105.33.

Support levels: 104.50, 104.20, 103.90, 103.60.

Trading tips

Long positions may be opened after the rebound from 104.50 and the breakout of 104.75 with the target at 105.16. Stop loss – 104.50. Implementation period: 2–3 days.

Short positions may be opened after the breakdown of 104.50 with the target at 103.90. Stop loss – 104.85.