This week, the pair USD/JPY had repeatedly tested important resistance level of 120.30, but failed to break it down. At the beginning of this week the pair regained after last Friday’s decline. However, on Wednesday the announcement by the Bank of Japan, that monetary policy would remain unchanged, has caused short-term correction. Investors had expected that new incentive measures would be introduced, but Japanese regulator did not let it happen. Today, the price has again tested the level of 120.30, failed to consolidate above this level and is now undergoing correction.
Today, the data on the primary and secondary applications for unemployment benefits in the US will become known. On Friday, quotes can be affected by the Chinese inflation statistics for March.
Support and resistance
Currently, key level is 119.85 (middle line of “Bollinger bands”). Breakout of this level will enable further decline in price to the levels of 119.40 and 119.00. Otherwise, the price can again test the level of 120.30.
In general, technical indicators show that the decline in quotes will continue. MACD histogram is in the positive zone; its volumes are decreasing again. Stochastic lines are crossing, going down.
Support levels: 119.85, 119.40 and 119.00.
Resistance levels: 120.30, 120.75 and 121.30.
In the current situation short positions with the target of 119.40 can be opened in case of consolidation of the price below the level of 119.85. Long positions are recommended if the price breaks down the level of 120.30. If it happens, the target of the long positions will be the level of 120.75.
Analytics by LiteForex Investments LimitedPublication source