USD/JPY: USD returned to active growth 08 February 2021, 09:30

USD/JPY: USD returned to active growth

08 February 2021, 09:30

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	105.65
Take Profit	106.00, 106.20
Stop Loss	105.33
Key Levels	104.75, 105.00, 105.16, 105.33, 105.60, 105.79, 106.00

Alternative scenario
Recommendation	SELL STOP
Entry Point	105.10
Take Profit	104.50
Stop Loss	105.50
Key Levels	104.75, 105.00, 105.16, 105.33, 105.60, 105.79, 106.00

Current trend

USD is significantly strengthening against JPY during today's trading in Asia, recovering from an equally active decline at the end of last week, when USD retreated from its local highs since October 12, 2020. The instrument adds about 0.24% and is actively testing the level of 105.50 for a breakout. The strong report on the US labor market released last Friday did not help USD to end a confident eight-day rally against JPY with growth, but influenced the balance of power in the short term.

Monday's statistics from Japan are poor. Eco Watchers Survey on Current Situation in January fell from 35.5 to 31.2 points, which, however, turned out to be better than the forecasts of a decrease to 25 points. Eco Watchers Survey Outlook for the same period increased from 37.1 to 39.9 points, but failed to reach the expected values of 44.2 points.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is actively expanding, while remaining too spacious for the current activity level in the market. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic, having reached its highs, showed a decline, responding to the correctional fall of USD at the end of the last trading week.

Resistance levels: 105.60, 105.79, 106.00.

Support levels: 105.33, 105.16, 105.00, 104.75.

Trading tips

To open new long positions, one can rely on the breakout of 105.60. Take-profit – 106.00–106.20. Stop-loss – 105.33. Implementation time: 1-2 days.

The development of correctional trend with the breakdown of 105.16 may become a signal for new sales with target at 104.50. Stop-loss – 105.50.