USD/JPY: trading is recommended in the current range

29 April, 2015

Current trend
At the end of last week the pair USD/JPY had dropped to the level of 119.30 and went further down to the local lows of 118.80. On Monday, the USD won back some of the losses and returned to the level of 119.30. However by the evening, the price reached the local lows once again. Today, American currency got support from investors in advance of the release of the U.S. GDP for Q1 and the decision of the U.S. Fed on interest rates. It is worth noting that tomorrow the data on Japanese industrial output will be known, and the Bank of Japan will announce interest rate decision.

Although market is favourable to the USD, it is unlikely that today’s statistics will be positive. GDP forecast is negative. In addition, it is also unlikely that the key interest rate will be raised in the near future.

Currently, economic growth rate in the USD has slowed down, and the USD goes down versus the major currencies. In such situation it seems risky to invest into the USD. On the other hand, Japanese economy is in recession and its macro-economic statistics is not favourable either. Given the circumstances it is assumed that the pair will continue to move in the sideways channel in the wide range of 118.80-120.30.

Support and resistance
Support levels: 119.10, 118.80, 118.60, 118.00, 117.70, 117.10 and 116.00.
Resistance levels: 119.35, 119.70, 120.00, 120.30, 120.70, 121.20 and 121.50.

Trading tips
In the current situation it is advisable to trade from the limits of the range. Sell positions can be opened at the upper limits of the channel, while buy orders can be placed at the bottom limits. 

Presented by LiteForex

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