USD/JPY: the reversal from the support levels is possibleCurrent trend
From the middle of March the JPY is growing against the USD. As the USD, the EUR and GBP are unstable, the investors’ interest towards the JPY is growing. In addition the Japan main economy sectors data are positive, which also supports the JPY. The USA macroeconomic data are controversial, and the restrained position of the USA FRS members upon the further decreasing of the stimulating program presses the USD significantly, so the pair is lowering during the last 5 trading weeks.
Last week the list of the negative USA issues was published, which weakened the USD. The Japan Industrial Production data and the Machine Tool Orders report, published in the same period, were positive.
Today the volatility is not expected to be high due to the absence of the key macroeconomical issues.Support and resistance
Today the pair continued to lower, and the decrease can continue to the level of 107.30 in the short term, and then the pair will reverse into the upward correction. The Bank of Japan has stated that the high rate of the JPY is not profitable for the Japan economy, so the reversal is possible in the middle term period. The trend can change at the key support level at 107.30, 106.50, 105.50.
The technical indicators reflect the consolidation of the trend, MACD short positions volumes are growing.
Support levels: 108.10, 107.30, 106.50, 105.50, 104.10
Resistance levels: 108.80, 109.15, 109.85, 110.10, 110.50, 111.45, 112.20, 112.90Trading scenario
It’s better to increase the volume of the short positions in the current trend with the target at 107.30, 106.50, but remember that the trend can change in the nearest future. Stop loss is at 109.30.
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