USD/JPY: BoJ Governor satisfied with GDP statistics

FX:USDJPY   U.S. Dollar / Japanese Yen
16 0 2
Current trend

Yesterday, the Bank of Japan decided to keep its current monetary policy unchanged. BoJ Governor considers that a decline in the third-quarter GDP was insignificant. However, as many economists suggest, the Regulator may be back to discussion on easing policy at its next meeting, due on 28-29 January.
At the same time, market participant are getting ready for a hike in the US interest rates. On Thursday, US stock indices declined, while Fed funds futures show a 72% chance of a rate increase in December against a 58% likelihood two weeks ago.

Support and resistance

On the daily chart , the USD/JPY             pair is trading in an upward channel with the upper border at the level of 129.00.
OsMA and Stochastic indicators on the 4-hour and daily charts recommend short positions, but on the weekly chart, they are giving buy signals.

The breakdown of 122.50 allows the pair to decline to the support levels of 122.00, 121.50 (EMA200 on the 4-hour chart and 50.0% Fibonacci). Otherwise, after the breakout of the resistance level of 123.70, the pair would strengthen to 125.00, 125.65 (year highs).

Support levels: 122.50, 122.00, 121.50.
Resistance levels: 123.50, 123.70, 124.00, 124.50.

Trading tips

Long positions can be opened from the level of 123.10 with targets at 123.70, 124.00, 124.50 and stop-loss at 122.70.
Short positions can be opened from the level of 122.40 with targets at 122.10, 121.50 and stop-loss at 122.80.
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