USD/JPY: dollar wins back losses 22 February 2021, 09:43

USD/JPY: dollar wins back losses

22 February 2021, 09:43

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	105.80
Take Profit	106.25, 106.50
Stop Loss	105.40
Key Levels	104.50, 104.75, 105.17, 105.40, 105.75, 106.00, 106.25, 106.50

Alternative scenario
Recommendation	SELL STOP
Entry Point	105.35
Take Profit	104.75
Stop Loss	105.75
Key Levels	104.50, 104.75, 105.17, 105.40, 105.75, 106.00, 106.25, 106.50

Current trend

The US dollar is growing steadily against the Japanese yen during the Asian session on February 22, recovering from an active decline in the second half of last trading week, when it retreated from its record highs of September 11, 2020. Investors reacted to the publication of poor Initial Jobless Claims data, which reflected the slow recovery of the US labor market.

The yen was supported by the Japanese statistics. Thus, Manufacturing PMI from Jibun Bank in February rose from 49.8 to 50.6 points, while analysts' forecasts suggested its decline to 49.7 points.

Today, markets in Japan are closed due to the celebration of the Emperor's Birthday, so rare US publications will be in focus. Also, closer to the end of the daily session, the market is waiting for the speech of the representative of the US Federal Reserve Michelle Bowman.

Support and resistance

On the daily chart, Bollinger bands maintain a confident upward direction, weakly reacting to the instrument's decline at the end of last week. The price range expands from above, letting the “bulls” renew record highs. The MACD indicator is going down, maintaining a very poor sell signal (the histogram is below the signal line). Stochastic is showing a slightly more confident downward trend, which, however, weakly correlates with the real state of the market.

Resistance levels: 105.75, 106.00, 106.25, 106.50.

Support levels: 105.40, 105.17, 104.75, 104.50.

Trading tips

Long positions may be opened after the breakout of 105.75 with the targets at 106.25–106.50. Stop loss – 105.40. Implementation period: 2–3 days.

Short positions may be opened after the rebound from 105.75 and the breakdown of 105.40 with the target at 104.75. Stop loss – 105.75.