Since September 21, USD / JPY has been trading higher. At this moment, the pair is trading at 111.59, close to the strong resistance level of 6/8 of murray located at 111.71.
USD/JPY got stuck in the range between 110.40 and 109.20 from August 9 to September 22. This mode is represented by a rectangular pattern, which was eventually sharply broken. The trading volume for USD/JPY has increased, thus giving the yen strong bearish momentum. However, it could be reaching a level of strong resistance and overbought levels.
A break above 6/8 of murray means that the uptrend continues to prevail and the pair could reach the key level of 112.00. It is not ruled out that USD / JPY continues to rise, but overbought conditions indicate that a break above 111.71 is unlikely. Meanwhile, we can take advantage of selling below 111.71 with targets at 4/8 of murray around 110.93.
The short-term outlook remains bullish for USD/JPY. However, conditions remain deeply overbought, so only a break below 110.93 would indicate that current upward pressure has eased. If there is no breakout and consolidation below 4/8, USD / JPY will only make a technical correction and could continue its rise with targets at 112.10 where there is 7/8 of murray.
The weakness of the Japanese yen is due to a change in risk sentiment. Hence, investors are taking refuge in the US dollar, due to the fall in European stocks as a result of the escalating energy crisis in the euro zone and China. Inflated gas and oil prices have triggered an energy crisis in Europe. Governments are warning of blackouts and factories being forced to close.
In this context, the yen could continue its upward course in the medium term. Although according to the eagle indicator, the pair has reached the level of 95 which represents extremely overbought market conditions. It means that there is an opportunity to sell as long as the pair remains below or near of 111.71, with targets at 111.32 and 110.93 (4/8).
Support and Resistance Levels for September 28 - 29, 2021
Resistance (3) 112,10
Resistance (2) 111,88
Resistance (1) 111,71
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Support (1) 111,30
Support (2) 111,18
Support (3) 110,93
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Trading tip for USD/JPY for September 28 - 29, 2021
Sell below 111,71 (6/8) with take profit at 111,30 (5/8) and 110,93 (4/8), stop loss above 111,95.
