Current trend
During the trading session on Thursday, December, 29, the USD was lowering against the yen, reaching the new local minimum from the 14 of December and then renewed it during the morning session on the 30 of December. The “bearish” dynamics is due to the correctional moods before the New Year holydays. The investors usually close the most of positions in this time of the year, in addition, the dollar is greatly overbought against the yen as a result of the November growth. The USD index has reached the highest level from the 2002 year.
Also, the macroeconomical data in USA has affected the trading sessions on Thursday. The weekly Initial Jobless Claims index has lowered from 275K to 265K, which is by 1K worth than expected value. On the contrary, the Continuing Jobless Claims index has grown from 2.039 million to 2.102 million, while the analysts expected the lowering to 2.030 million.
Support and resistance
Resistance levels: 116.54 (actively testing during the morning session 30 December), 117.00, 117.58, 118.00, 118.24 (maximum on December, 20), 118.66 (maximum on December, 15) and 119.06 (the level of the February, 3, 2016).
Support levels: 116.04 (current local minimum, renewed during the morning session on December, 30), 115.61, 115.00 (the level on December, 14), 114.40 (maximum on December, 7), 114.00, 113.50, 113.00 (the level on December, 5) and 112.60.
On the daily chart the Bollinger Bands indicator is growing. The price range is rapidly narrowing, reflecting the appearance of the correctional dynamics. Stick to the channel trade strategy until the situation is clear.
The MACD is lowering, keeping rather strong sell signal (the histogram is below the signal line). Keep the short positions in the short term and do not open new positions.
The Stochastic has reached the overbought area, was corrected and reversed sideways. It’s better to wait for the clear signal.
Trading scenario
Open long positions after the breakout of 117.00. Take profit is at 118.24 or 118.66-119.06. Stop loss is at 116.50-116.35. Implementation period: 2-3 days.
The alternative scenario is the returning of the strong “bearish” trend and a downward breakout of the level of 116.04. In this case the “bearish” targets are at 114.40-114.00. Stop loss is at 116.54. Implementation period: 2-3 days.
