USD/JPY: pair returned to growth
Yesterday the USD/JPY pair significantly strengthened. Trading in the pair was very volatile due to a large number of macroeconomic publications that was coming out and approaching US Fed meeting at which, as expected, the regulator will increase its key interest rate.
The pair was supported by strong data on consumer inflation in the US. The Consumer Price Index for November grew from 0.2% to 0.5% that was better than economists forecasted. *
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range is slowly narrowing. MACD is growing and giving a buy signal. Stochastic bounced off the oversold zone and growing.
The indicators recommend long positions.
Support levels: 121.48, 121.00, 120.56, 120.34 (14 December low), 120.00 (22 October low), 119.62, 119.39.
Resistance levels: 122.00 (local high), 122.22 (11 December high), 122.60, 122.93, 123.35, 123.66 (2 December high), 124.00.
Long positions can be opened after the breakout of the level of 122.22 with targets at 123.25, 123.66 and stop-loss at 121.40. Validity – 2-4 days.
Short positions can be opened after the price rebound from the level of 122.00 with targets at 121.00, 120.50, 120.30 and stop-loss at 122.60. Validity – 2-3 days.