USD/JPY: updating record highs 03 March 2021, 10:15

USD/JPY: updating record highs

03 March 2021, 10:15

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	107.05
Take Profit	107.78, 108.15
Stop Loss	106.25
Key Levels	105.75, 106.00, 106.25, 106.66, 107.00, 107.42, 107.78, 108.15

Alternative scenario
Recommendation	SELL STOP
Entry Point	106.60
Take Profit	106.00
Stop Loss	107.10
Key Levels	105.75, 106.00, 106.25, 106.66, 107.00, 107.42, 107.78, 108.15

Current trend

USD has returned to gains against JPY during today's Asian session and is currently trading near record highs, updated the day before. Investors are again actively buying USD, as the market is gripped by anxiety related to the sharp rise in Treasury bond yields, which has already been reflected in the rhetoric of some regulators.

USD was additionally supported by good macroeconomic statistics from the US yesterday. The retail sales index from Redbook rose 4.6% YoY for the week ending February 26, after rising 2.9% YoY in the previous period. IBD/TIPP Economic Optimism in March jumped from 51.9 to 55.4 points.

Today, investors are focused on the statistics on business activity in services sector from ISM and Markit. Closer to the end of the trading session, the US Fed's economic review, the Beige Book, will be published.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range expands, freeing a path to new record highs for the "bulls". MACD indicator is growing preserving a rather stable buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought USD in the ultra-short term.

Existing long positions should be kept until technical indicators are clarified.

Resistance levels: 107.00, 107.42, 107.78, 108.15.

Support levels: 106.66, 106.25, 106.00, 105.75.

Trading tips

To open long positions, one can rely on the breakout of 107.00. Take-profit – 107.78–108.15. Stop-loss – 106.25. Implementation time: 2-3 days.

A rebound from 107.00 as from resistance, followed by a breakdown of 106.66 may become a signal for new sales with the target at 106.00. Stop-loss – 107.10.