Yesterday the USD/JPY pair significantly strengthened. The pair was supported by poor macroeconomic statistics from Japan that came out worse than already negative forecasts. According to preliminary data, the Japanese GDP for the third quarter fell by 0.8% against forecasted decline of 0.2%.
During the week, attention needs to be paid to publications from Japan where the BoJ Interest Rate Decision and October data on imports and exports are due.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is widening. MACD is growing and giving a buy signal. Stochastic is near the overbought zone and turning up again.
The indicators recommend considering long positions.
Support levels: 123.60 (local low), 122.60, 122.22 (16 November low), 122.00, 121.48, 121.00, 120.34, 120.00 (psychologically important level), 119.62.
Resistance levels: 123.60 (9 November high), 124.00, 124.57 (middle of August high), 125.00, 125.40.
Long positions can be opened after the breakout of the level of 123.55 (with the appropriate indicators signals) with targets at 124.40, 125.00 and stop-loss at 123.15. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 122.90 with the target at 122.40 and stop-loss at 123.20. Validity – 1-2 days.