USD/JPY: Technical Analysis and Trading Recommendations_04/11/2022


USD/JPY maintains a positive momentum, accelerating growth. Today the pair topped the high of the previous month (at 125.10), continuing its growth for the 6th week in a row.


As we noted in our Fundamental Analysis today, “the divergence between the monetary policy of the Fed and the Bank of Japan is likely to widen, creating preconditions for further growth of USD/JPY. In this case, the pair will head towards multi-year highs near 135.00, reached in January 2002”.


The nearest upside target is 125.65 (Fibonacci 100% retracement to the pair's fall from 125.65 that began in June 2015).

In the event of a breakdown of this resistance level, USD/JPY will continue to grow until it “gropes” for new resistance levels. The main reason is the prospect of further divergence between the monetary policy trajectories of the Fed and the Bank of Japan. The weakening of the yen is also facilitated by the events in Ukraine, and inflation accelerated in Japan against the backdrop of a sharp rise in energy prices (Japan is the largest net importer of them).

USD/JPY H4 Chart

In an alternative scenario, and after the breakdown of the support level 123.33 (EMA200 on the 1-hour chart), USD/JPY will head towards the support levels 121.30 (local level), 120.23 (EMA200 on the 4-hour chart), which can only be considered as a corrective decline.

USD/JPY H1 Chart

A deeper decline in the current situation is unlikely. Trading above the key support levels 114.50 (EMA200 on the daily chart and local highs), 110.15 (EMA200 on the weekly chart and the Fibonacci level 38.2% of the correction to the fall of the pair from the mark of 125.65 that began in June 2015), USD/JPY remains in the zone bull market.

Support levels: 125.10, 124.40, 123.33, 121.30, 120.23, 116.00, 114.50, 113.10, 110.15

Resistance levels: 125.65

Trading scenarios

Buy Stop 125.50. Stop Loss 124.40. Take-Profit 125.65, 126.00, 127.00, 128.00, 134.00, 135.00

Sell ​​Stop 124.40. Stop Loss 125.50. Take-Profit 124.00, 123.33, 121.30, 120.30