USD/JPY: general review

Current trend, The past two days, the yen is moderately strengthening against USD, despite the latest ambiguous inflation data.

In October, the consumer price index in Japan rose expectedly from 1.2% to 1.4% (for the fourth consecutive month), while the basic CPI remained at 1.0%. According to the Ministry of Internal Affairs and Communications, the rise in prices was due to an increase in the cost of gasoline, kerosene and other types of fuel. A serious decline in oil prices in November could put pressure on Japanese inflation: Consumer price indices may start to decline again, not approached the target level of 2.0%.

This may entail a forced refusal of the Bank of Japan to take any measures to tighten monetary policy, although in some aspects it begins to negatively affect the economy. The head of the regulator Haruhiko Kuroda has already noted that low interest rates reduce the profitability of regional banks.

Support and resistance

Currently, the price has reversed around the level of 112.50 (Murrey [4/8]) and is trying to break out the midline of Bollinger Bands (113.28). If successful, growth may continue to 114.06 (Murrey [6/8], the upper line of Bollinger Bands) and 114.50 (October highs). This is confirmed by the Stochastic reversed up. The level of 112.5 will be the key one for the “bears”.    If the price consolidates below it, a decrease to 111.72 (Murrey [3/8]) and 110.93 (Murrey [2/8]) is possible.

Support levels: 112.50, 111.72, 110.93.

Resistance levels: 113.28, 114.06, 114.50.


Trading tips

Long positions may be opened above 113.28 with targets at 114.06, 114.50 and stop loss at 112.80.

Short positions may be opened below 112.50 with targets at 111.72, 110.93 and stop loss at 112.90.

Implementation period: 4-5 days.



Timeframe Weekly
Recommendation BUY STOP
Entry Point 113.35
Take Profit 114.06, 114.50
Stop Loss 112.80
Key Levels 110.93, 111.72, 112.50, 113.28, 114.06, 114.50


Alternative scenario


Recommendation SELL STOP
Entry Point 112.45
Take Profit 111.72, 110.93
Stop Loss 112.90
Key Levels 110.93, 111.72, 112.50, 113.28, 114.06, 114.50

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