Since August 20, the USD / JPY pair has been trapped within a price range between 110.40 and 109.40. From those levels, a slightly upward channel has been formed. The probability of a downward movement in the next few days increases since the price is below the SMA of 21.
Yesterday, the Japanese yen touched the lower border of the range channel, around 109.60. At that level, the pair has been rebounding until it finds resistance at the 200 EMA located at 109.85. Since it is now located in a resistance zone, a bearish move is likely to follow below the psychological level of 110.01.
A confirmation above 110.40 would enable a bullish extension, so the price could rise to the August 11 high of 110.79, and a little higher at 110.93 which is the 4/8 murray line. This is a key level of strong resistance and it will be a good selling point.
On the contrary, a break below 109.60, the lower border of the range, will be a good opportunity to sell with targets at 109.37. If the downward pressure prevails. the price could fall to the -1/8 murray line located at 108.98.
As long as the Japanese Yen continues to move within the price range channel between 110.40 and 109.60, we can buy at the support channel and sell at the top of the channel. Besides, the 200 EMA and the 21 SMA could exert some downward pressure.
A good solution would be to sell below the SMA of 21 or wait for a pullback towards 110.40, with targets at 109.60. We should avoid selling above 110.40. The eagle indicator is showing a bearish signal.
Support and Resistance Levels for September 10 - 13, 2021
Resistance (3) 110.72
Resistance (2) 110.49
Resistance (1) 110.20
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Support (1) 109.41
Support (2) 109.18
Support (3) 109.05
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Trading tip for USD/JPY for September 10 - 13, 2021
Sell if there is a pullback at 110.01 or sell below 109.85 (EMA 200), with take profit at 109.60 and 109.41, stop loss above 110.40.
