22, November 2016

USD/JPY (a 4-hour chart)

General overview

The yen posted losses on Monday amid a weaker Merchandise Trade Balance release. The dollar finds buying interest amid rising bets for an eventual Fed rate-hike action.

Current situation

Even though the USD/JPY pair was unable to climb higher and retreated almost immediately after testing 111.00 the pair remained in the green figures on Monday. The price remains in an upward channel and slightly moved from its upper boundary. The price hovered above the moving averages in the 4 hours chart. The moving averages direction is upwards. The resistance can be found at 111.00, the support comes in at 110.00.

MACD decreased which indicates the buyers’ positions weakening. We also noted a bearish divergence of MACD in the 1 hour chart. The RSI indicator remains within overbought readings.

Trading recommendations

A failure to break 111.00 may lead to the dollar softening and its decline to 110.00. A break below the level will suggests further weakness towards 109.00.