Technical Analytics Report

USD/JPY: Technical Analysis Report 05 May 2021

USD/JPY: Technical Analysis Report 05 May 2021


Current trend: USD continues strengthening

 USD is showing ambiguous dynamics against JPY today, consolidating at 109.30. The day before, USD showed moderate growth, which was due to the overall positive market sentiment regarding the pace of recovery of the US economy after the coronavirus crisis. The buying sentiment was also supported by the speech of the US Treasury Secretary Janet Yellen, who spoke in favor of a rate hike soon in order to reduce the risks of overheating of the economy, as well as to slow down the rapidly growing inflation.

 It should be noted that on Tuesday, Japanese sites were closed to celebrate Children’s Day, so at the moment, not all investors have returned to the market. Tomorrow, the minutes of the Monetary Policy Committee of the Bank of Japan meeting are to be published.

 Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is expanding actively from above, freeing a path to new local highs for the “bulls”. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic, in turn, reversed downwards against the background of the appearance of the “bearish” trend at the beginning of the week and does not react to yesterday’s resumption of the growth of the instrument.

 Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up. 

·         Resistance levels: 109.68, 110.25, 110.60, 111.00.

·         Support levels: 109.17, 108.83, 108.37, 107.87.

 Trading Tips

To open long positions, one can rely on a confident breakout of 109.68. Take-profit – 110.60. Stop-loss – 109.30. Implementation time: 2-3 days. 

The return of “bearish” trend with the breakdown of 108.83 may become a signal for new sales with the target at 107.87. Stop-loss – 109.30.

 Scenario

Timeframe: Intraday

Recommendation: Buy Stop

Entry Point: 109.70

Take Profit: 110.60

Stop Loss: 109.30

Key Levels: 107.87, 108.37, 108.83, 109.17, 109.68, 110.25, 110.60, 111.00

 Alternative Scenario

Timeframe: Intraday

Recommendation: Sell Stop

Entry Point: 108.80

Take Profit: 107.87

Stop Loss: 109.30

Key Levels: 107.87, 108.37, 108.83, 109.17, 109.68, 110.25, 110.60, 111.00


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