Macro Resistance Level In View For The USD/JPY
Shain Vernier • 1 min read
Since the lows of late March, the Greenback has posted consistent gains across the majors. One of the highlights for this period has been the bullish rally of the USD/JPY. From beneath the 105.00 handle, the USD/JPY has risen more than 500 pips, north of 110.00. The action has brought a key macro resistance level within striking distance.
Until later in the week, the economic calendar facing the USD/JPY is relatively vacant. Here are the economic events to watch facing this pair:
Tuesday BoJ Harada Speech
Wednesday U.S. Independence Day
Thursday FOMC Minutes
Thursday Japan, Leading Economic Index (May)
Friday U.S. Non-Farm Payrolls
USD/JPY Technical Outlook
The first six months of 2018 have taken the USD/JPY on a rollercoaster ride. Featuring a massive sell-off and subsequent recovery, this market appears ready to test yearly highs.
Today’s bearish action may bring several areas of downside support on the daily chart into play:
- Support(1): Daily SMA, 110.12
- Support(2): Bollinger MP, 110.05
Bottom Line: While the areas of daily downside support may be tested very soon, the 78% retracement of 2018’s range (111.45) is a premium entry to the short. Sells from 111.39 with an initial stop at 111.76, yields 37 pips when using a 1:1 risk vs reward ratio. This trade recommendation will stay active until elected.
For the remainder of today’s U.S. session, buys from 110.15 are a positive entry to the bull. With an initial stop at 109.94, this trade produces 21 pips when implementing a 1:1 risk vs reward management plan.