Monday, April 18, 2016

USD/JPY: Decline Expected


Scenario
Timeframe Weekly
Recommendation SELL LIMIT
Entry Point 109.30, 109.95, 107.50
Take Profit 105.50, 103.50
Stop Loss 110.15
Key Levels 102.05, 105.00, 105.90, 107.00, 108.50, 109.95, 110.75, 111.60, 112.30, 112.65

Current Trend
The Yen continues strengthening against the US Dollar despite a growth in the demand for risky assets. Last week, the pair started consolidating near the key support levels, but it still remains within a descending range. The Japanese currency has gained support from favorable statistics on major sectors of the economy. The US Dollar, in its turn, has been declining due to weak data on industrial production and key indices.
This week, attention needs to be paid to data on Japan’s key indices and the US labour market.

Support and Resistance
In the medium term, the pair is expected to consolidate within a narrow range of 109.95-107.60. Amid a growth in the demand for the US Dollar, an upward correction can develop. However, as the pair is trading within a downward channel, short positions seem more preferable.
Technical indicators confirm the pair tends to decline. MACD histogram is in the negative zone; its volumes are growing. Bollinger bands have turned down again.
Support levels: 107.60, 107.00, 105.90, 105.00, 103.50, 102.05.
Resistance levels: 108.50, 109.30, 109.95, 110.75, 111.60, 112.30, 112.65.

Trading Tips
Pending sell orders can be placed near the upper border of the range, at the levels of 109.30, 109.95, and below the key support level of 107.60 with targets at 105.50, 103.50 and stop-loss at 110.15.

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