USD/JPY (a 4-hour chart)
The expected lateral trend resulted in a rather strong decline at the technical level of 120.40 due to worse-than-expected US September new home sales and the durable goods orders volume data. The stock market declined on Monday and Tuesday and as a result the market got the yen decrease by 82 points yesterday. The Bank of Japan intends to leave the current monetary policy unchanged. The Central Bank will make up a decision on this issue on the Friday meeting. Still the reason of yesterday’s pair growth was the FED decision that supported the greenback.
The price is finding the first support at 120.40, the next one is 119.20. The resistance is at 121.60, the next one is at 122.40.
There is a strong and confirmed buy signal; the pair is above the Cloud. The Tenkan-sen is directed downwards, the Kijun-sen is directed upwards, both lines are forming a “Golden Cross”. If the USD/JPY remains above the Cloud the growth will be continued.
The MACD indicator is in a positive territory now. The histogram is decreasing.
If the pair stays above the Cloud it has all chances to go to the level of 121.60. As an alternative scenario we will see a decrease to 119.20 and further to 118.40.