The Japanese yen was weakening last week. From the low at 108.70, it rose to the resistance zone of 110.33 due to the strength of the US dollar and the US non-farm payroll data released on Friday.
The USD/JPY pair weakened, reaching the resistance zone of 110.33 where the EMA of 200 in 4-hour charts is located. It represents a barrier for the Japanese yen that is preventing the currency from further depreciation.
The 110.22 zone in the USD/JPY is a key barrier. If the pair takes hold above it, it would point to a bullish movement in the zone of 110.70 and 111.63 high of July 2. For this, we can expect consolidation above 110.40.
On the contrary, we believe that USD/JPY could make a technical correction towards the 5/8 Murray support zone located at 109.76. The 21 SMA is located at this level and it could give the pair a good bullish rebound.
If the yen consolidates above 110.30/40, immediate resistance will be found at 110.70. A break above this level could lead to a trend reversal to the 112.00 level in the medium term.
In the short term, we can sell below 110.22 with targets at 109.76 and 109.37. This represents a drop to the 61.8% Fibonacci retracement that will give it the necessary momentum to the 110.70 resistance zone.
The Eagle indicator that measures the strength and volume of the market is showing a bearish signal, it is likely that there will be a bearish movement in the coming days.
Support and Resistance Levels for August 09 - 10, 2021
Resistance (3) 111.13
Resistance (2) 110.74
Resistance (1) 110.47
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Support (1) 109.80
Support (2) 109.42
Support (3) 109.16
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Trading tip for USD/JPY for August 09 - 10, 2021
Sell below 110.22 (EMA 200), with a take profit at 109.76 (5/8) and 109.37 (4/8), a stop loss above 110.55.
The material has been provided by InstaForex Company - www.instaforex.com