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Support & Resistance Levels – Is The Trend Reversing In USD/JPY?

Skerdian Meta•Monday, August 7, 2017•2 min read
USD/JPY has been trading in a downtrend for the last 4 weeks which has been pretty solid. It would be a mistake to go against it, but things might have changed now.
 
According to the rollercoaster, this forex pair has been in during most of this year, we might be entering a phase where this pair might reverse higher.
 
The 1.10 long-term support level was breached a few times last week, but the 20 pip buffer zone provided solid support. Despite the bears having multiple attempts at it, it held well and finally reversed the price higher.
 
Besides that, the weekly forex chart looks pretty bullish as you can see from the chart below; the stochastic is almost overbought, the 50 SMA provided solid support and last week´s candlestick formed a Doji. All of these are reversing signals.  

 

USD/JPY

Support                                                                        Resistance

1 – 110.60 (Medium – Strong orders this morning)           1 – 111 (Medium – Resistance last week)

2 – 110.40-50 (Medium – Previous support)                     2 – 1.11.20 (Mild – 200 SMA on H1 chart)

3 – 110 (Strong – Big round number)                               3 – 111.50-60 (Strong – 2 MAs on H4 chart)

4 – 109.80-90 (Strong – Solid support last week)            4 – 111.90-112 (Mild – 100 SMA on daily chart)

?Can you spot the three upward indicators?

The technical analysis clearly points upward and the 120 pip move higher last Friday was a sign that a reverse is taking place. The mildly positive US economic data on Friday sent this forex pair 120 pips higher, which means that the fundamentals are bullish at the moment.

Trade Idea: According to the analysis above, I would only look to buy now. Although, the H4 chart is overbought so it would be wise to wait for a retrace lower to 111.40-50 and then look to open a buy forex signal targeting 30 pips as the first target and pulling the stop higher as the price climbs up.   

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ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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