USD/JPY: Yen continues falling amid strong macroeconomic statistics

28 January, 2016

Current trend

Yesterday the pair grew amid strong macroeconomic statistics from the US. Data on New Home Sales for December showed a growth to 544 thousands that was substantially better than forecasts.

At the same time, as was expected the US Fed left the interest rate unchanged at its current 0.5%. Members made the decision unanimously. In the Policy Statement, it was noted that the regulator would continue monitoring the situation on the world markets. However, despite some difficulties the rate hike in March is still possible. 

Support and resistance

Bollinger Bands on the daily chart is turning up while the price range is widening. MACD is growing and giving a quite strong buy signal. Stochastic is in the overbought zone and trying to turn down.

The indicators recommend waiting for clearer trading signals.

Support levels: 118.67 (local low), 118.35, 118.00, 117.32, 117.00, 116.50, 116.00 (20 January low).

Resistance levels: 119.06 (local high), 119.69 (5 January high), 120.00 (psychologically important level), 120.56, 121.00.                                                      

Trading tips

Long positions can be opened after the breakout of the levels of 118.90, 119.20 (with the appropriate indicators signals) with the target at 120.00 and stop-loss at 118.60. Validity – 2-3 days.

Short positions can be opened after the breakdown of the level of 118.00 with targets at 117.50, 116.80 and stop-loss at 118.30. Validity – 2-3 days.

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