USD/JPY: consolidation pending new drivers 01 March 2021, 11:03

USD/JPY: consolidation pending new drivers

01 March 2021, 11:03

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	106.75
Take Profit	107.78
Stop Loss	106.00
Key Levels	105.40, 105.75, 106.00, 106.25, 106.69, 107.00, 107.42, 107.78

Alternative scenario
Recommendation	SELL STOP
Entry Point	106.20
Take Profit	105.40
Stop Loss	106.69
Key Levels	105.40, 105.75, 106.00, 106.25, 106.69, 107.00, 107.42, 107.78

Current trend

USD is flat against JPY in Asian trading today, consolidating near its record highs since August 2020. USD received a powerful impetus to growth at the end of the last trading week, as investors were actively selling risky assets amid correction in the bond market. The instrument was additionally supported by good macroeconomic statistics from the USA, which was quite close to its forecasts.

Today, JPY is in demand after the publication of data from Japan. Jibun Bank Manufacturing PMI in February rose from 50.6 to 51.4 points, which turned out to be better than market forecasts. Tomorrow, Japanese investors are expecting the release of the January data on the labor market, in particular, the unemployment rate.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is expanding from above, but it fails to catch the surge of "bullish" sentiment at the moment. MACD indicator is growing preserving a moderate buy signal (located above the signal line). Stochastic, having approached its highs is reversing into a horizontal plane, indicating risks of overbought USD in the ultra-short term.

Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 106.69, 107.00, 107.42, 107.78.

Support levels: 106.25, 106.00, 105.75, 105.40.

 

Trading tips

To open long positions, one can rely on a confident breakout of 106.69. Take-profit – 107.78. Stop-loss – 106.00. Implementation time: 2-3 days.

A rebound from 106.69 as from resistance, followed by a breakdown of 106.25 may become a signal for new sales with the target at 105.40. Stop-loss – 106.69.