The USD/JPY pair has been trading within a symmetrical triangle pattern, below the 21 SMA and the strong resistance of +1/8 Murray located at 114.06.
The daily chart shows that the yen is trading in a limited range between 113.75 - 113.23. Since November 29, the yen has been testing the resistance of the 21 SMA. Each time it was moving back. This level is expected to continue offering resistance for the next few days.
A breakout of 113.80 and a consolidation above 114.06 will be the start of a bullish wave towards the strong resistance level of 115.62.
On the contrary, if investors seek shelter in the USD/JPY pair, it could fall below 113.78 and the break of the symmetric triangle pattern will favor the strengthening of the Japanese currency, and fall to 8/8 of Murray at 112.50.
Investors are in anticipation of the outcome of the FOMC's monetary policy meeting. The US central bank is expected to announce its decision in the next few hours in the afternoon of the American session.
A favorable data expected by investors will give the yen a strong push to break above 114.06 and rise to the level of 115.62. On the contrary, if the Fed does not provide clear details, it could strengthen the yen and fall to 112.50.
Our trading plan is to sell while the yen is trading below the SMA of 21 with targets at 113.00 and up to 112.50. The eagle indicator is providing negative signal with a bearish direction.
Support and Resistance Levels for December 15 - 16, 2021
Resistance (3) 114.50
Resistance (2) 114.09
Resistance (1) 113.93
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Support (1) 113.44
Support (2) 113.26
Support (3) 113.11
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A trading tip for USD/JPY on December 15 - 16, 2021
Sell below 113.78 (21 SMA) with take profit at 113.11 and 112.50 (8/8), stop loss above 114.25.
