USD/JPY is trading lower in the early American session. It is trading within a downtrend channel and below the SMA of 21 located at 113.80. It is likely to continue its downward movement to the support of the bullish channel and up to 5/8 murray located at 113.28.
The Japanese yen has always been viewed as a safe haven currency. Today we notice a fall in the equity market after the all-time highs that it has made this week. The yen is likely to fall to the bottom of the uptrend channel. This level suggests a technical bounce with targets at 114.06 (6/8).
On the other hand, investors will be awaiting the declaration of monetary policy by the Bank of Japan in the Asian session on October 29. The policy decisions are likely to trigger higher volatility in the market. The pair is expected to make efforts to break the top of the bearish channel around 114.10. If the decision is positive for the yen, the pair could fall to the support of 113.28 around 5/8 murray.
The medium-term outlook remains bullish for the Japanese yen as long as it continues to trade above the 200 EMA located at 112.00. Any technical bounce around this level suggests an opportunity to buy.
On the other hand, in the short term, we expect a technical bounce in the uptrend channel that has been developing since October 4. The eagle indicator is showing an oversold level with an imminent technical bounce in the next few hours.
The eagle indicator has fallen to the level 5 points. This indicates an imminent technical rebound for the pair. The currency pair is likely to fall. That is what exactly is happening at the moment. The pair finds support around 113.40 and at that level it would be a good point to buy with targets towards 114.06 that is 6/8 of Murray.
Support and Resistance Levels for October 27 - 28, 2021
Resistance (3) 114.31
Resistance (2) 114.02
Resistance (1) 113.74
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Support (1) 113.38
Support (2) 113.28
Support (3) 113.02
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A trading tip for USD/JPY for October 27 - 28, 2021
Buy if rebound 113.40 (support of bullish channel) with take profit at 113.74 and 114.06 (6/8), stop loss below 113.02.
The material has been provided by InstaForex Company - www.instaforex.com