Published On: Mon, Mar 6th, 2017

USD/JPY: demand for dollar supports uptrend

InstaForex

Current trend

Lingering downward trend formed in February gave way to a sudden shoot-up as demand for American dollar grew. Dollar went up after Trump’s speech to Congress, supported by overall economic growth in USA. The additional growth factor was falling demand for yen, which was a safe haven currency at the beginning of this year. Investors also favor buying dollar after FOMC members’ comments on interest rate hike on closest sessions. Yen restored some of its positions recently, but the correction is more likely. This week, the main catalyst is macroeconomic statistics from Japan, namely the data on economy growth and main indices. Besides, there are important releases of data on USA labor market.

Support and resistance

From the technical point of view, the pair received support breaking through the strong support level and the upper border of long-term downward channel (113.50), providing growth for long positions and cutting the short ones. The pair left the downward trend and is heading upwards. There’s high possibility of forming a new upward wave with targets at 115.00, 115.50. Today, the pair is consolidating and picking up momentum for its future growth. Technical indicators readjusted and give a buy signal, MACD reflects high volume of long positions, and Bollinger Bands aim forward.

Support levels: 113.75, 113.50, 112.95, 112.65, 112.00, 111.75, 111.50, 111.00, 110.10.

Resistance levels: 114.00, 114.35, 114.70, 115.00, 115.50, 116.10.

Trading tips

In this situation, long positions can be opened at current level with targets at 115.50 and stop-loss at 113.20.

Forex Analysis

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