USD/JPY

USD/JPY: USD remains under pressure

Current trend. USD showed a decline against JPY on Monday, having updated local lows of October 30.

US investors are focused on the trade conflict between the United States and China due to which the participants of the APEC summit in Papua New Guinea could not sign the final declaration. Thus, investors' hopes for Donald Trump and Xi Jinping to conclude an agreement within the G20 meeting melted away. The US administration launched a list of 142 requirements towards the PRC, and last week, China presented a list of possible concessions, which, however, did not satisfy Washington. Currently, further escalation of the conflict seems more likely than the reconciliation of the parties.

Support and resistance

Bollinger Bands in D1 chart demonstrate a slight decrease. The price range is expanding, but it fails to catch the development of "bearish" trend at the moment. MACD is declining keeping a stable sell signal (located below the signal line). In addition, the indicator is trying to consolidate below the zero mark. Stochastic keeps a downward direction but is rapidly approaching its minimum levels, which indicates the risks of oversold USD in the ultra-short term.

Existing short positions should be kept until the situation clears up.

Resistance levels: 112.71, 113.00, 113.16, 113.37.

Support levels: 112.38, 112.15, 111.82, 111.61.

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Trading tips

Long positions can be opened if the price rebounds from 112.38 followed by the breakout of 112.71. Take profit — 113.37 or 113.50. Stop loss — 112.38.

A confident breakdown of 112.38 may become a signal to further sales with target at 111.82 or 111.61. Stop loss — 112.71.

Implementation period: 2-3 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 112.80
Take Profit 113.37, 113.50
Stop Loss 112.38
Key Levels 111.61, 111.82, 112.15, 112.38, 112.71, 113.00, 113.16, 113.37

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 112.30
Take Profit 111.82, 111.61
Stop Loss 112.71
Key Levels 111.61, 111.82, 112.15, 112.38, 112.71, 113.00, 113.16, 113.37

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