18, November 2016

USD/JPY (a 4-hour chart)

General overview

The yen retreated from the daily highs after the BoJ’s decision to buy unlimited amount of JGBs.

Current situation

Fresh buying pressure around the U.S. dollar boosted USD/JPY to fresh highs. After refreshing highs at 109.76 prices rolled back and returned to the nearest support region. The pair was under pressure struggling hard with the 109.00 level to go lower on Thursday. The pair bounced from the support 109.00 and trended higher ahead of the NY opening. The price tested and bounced upwards from the 50-EMA in the 1 hour chart. The 50-EMA became a solid barrier which limited the dollar further weakness. All moving averages were pointing higher. The resistance can be found at 110.00, the support comes in at 109.00.

MACD remained at the same level which confirms the strength of buyers. The RSI indicator was holding near overbought levels.

Trading recommendations

The overall outlook is neutral/bullish. A firm break below 109.00 handle would open the way towards 108.00. Nevertheless, we would be buying the pair until it stays above 109.00.