USD/JPY

USD/JPY: the pair is trading in both directions

Current trend

The US dollar showed a downward trend against the Japanese yen on Tuesday, but today it is again traded upwards. Investors are discussing published minutes of the Bank of Japan meeting on monetary policy from January 22-23. The documents do not contain anything fundamentally new. The BoJ still maintains a benchmark for consumer inflation at 2% and is considering the possibility of additional stimulation of the economy, if the growth of inflation risks starts to slow down.

The minutes of the Fed meeting, which will be published later on Wednesday, are somewhat more interesting. Despite the fact that changes in monetary policy are not expected, investors are waiting to see the regulator’s plans for a rate increase this year. The Fed may completely abandon the idea of a rate increase, or it will only do it once.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is narrowing, reflecting the ambiguous nature of trading last days. MACD is going down preserving a stable sell signal (being located under the signal line). Stochastic, which demonstrated a steady decline at the beginning of the week, also tends to reverse horizontally in the center of its working area.

To open new transactions, one should wait for additional signals to appear.

Resistance levels: 111.68, 111.89, 112.12.

Support levels: 111.50, 111.37, 111.14, 111.01.

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Trading tips

To open long positions, one can rely on the breakout of 111.68. Take-profit — 112.12. Stop loss – 111.50. Implementation period: 1-2 days.

A rebound from 111.68, as from resistance, followed by a breakdown of 111.50, may become a signal for corrective sales with the target at 111.14-111.01. Stop loss – 111.68. Implementation period: 2-3 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 111.75
Take Profit 112.12
Stop Loss 111.50
Key Levels 111.01, 111.01, 111.37, 111.50, 111.68, 111.89, 112.12

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 111.45
Take Profit 111.14, 111.01
Stop Loss 111.68
Key Levels 111.01, 111.01, 111.37, 111.50, 111.68, 111.89, 112.12

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