In the beginning of the current week USD continued to decrease against yen in view of the growth of demand for it and the decline of USD rate in view of the upcoming decision on the interest rate. Investors expected that FOMC members would postpone the increase of the interest rate and winding up the stimulation program. In his case USD had to gain additional pressure. However investors were surprised by the increase of the interest rate and a plan for winding up the assets purchase program, which was reflected in the pair's chart. During the first hours USD showed slight growth against yen, but in the beginning of the next day investors started to actively sell JPY in favor of USD. During 2 business days the pair went up over 250 points.
Today's macroeconomic calendar contains no important macroeconomic releases, and therefore the pair is likely to continue moving based on the trading tendencies.
Right now trading tendencies are in favor of USD, and the possibility that growth will continue and the pair will consolidate in the upward tendency is high. Rapid growth is less likely, and in the short term the pair is expected to correct downwards to 110.80. After that USD will continue to consolidate against JPY. The medium term scenario provides for 113.00 as a target level. Technical indicators in the H4 chart confirm growth outlook: indicates rapid growth in the volumes of long positions, and are directed upwards after rearrangement.
Support levels: 111.15, 110.80, 110.10, 109.50, 109.20, 108.80, 108.10, 107.30, 107.00.
Resistance levels: 111.70, 111.90, 112.10, 112.40, 113.00, 113.70, 114.50.
In the current situation deferred long positions may be opened from the level of 110.80 with target at 113.00 and stop-loss at 110.30.
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