USD/JPY (a 4-hour chart)
For several days the Japanese yen has been the weakest asset among the five world leading currencies. Investors are inclined negatively towards the yen after the Bank of Japan lowered the GDP and inflation forecasts for 2015 and 2016 financial year.
The world leading stock markets opened the trading week with the quotations growth that will contribute to the building up carry trade position within the Japanese yen as a funding currency.
Until recently, the level of 119.20 was a strong resistance. Now it is no less the strong support. It should be noted that the mark of 120.40 was tested at the very low volumes. The pair rebounded downwards after this testing.
The price is finding the first support at 119.20, the next one is at 118.30. The price is finding the first resistance at 120.40, the next one is at 121.60.
There is a confirmed and a strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a positive territory. The price is correcting.
The bulls’ target is the level 120.40.