USD/JPY opened with a bearish gap on the first day of this week around 115.20. Although this bearish GAP has now fully closed, the pair has not been able to consolidate above 115.50 due to the top of the bearish channel.
The worsening situation in Ukraine turned out to be a key factor boosting the status of the US dollar as a global reserve currency. However, the yen is a safe haven asset and is seen as a second dollar. In times of crisis, investors sell this pair.
According to the 4-hour chart, the Japanese yen is holding below the 21 SMA and below the 200 EMA below 6/8 Murray. This means that in the coming days a downtrend could continue as long as it remains below the key level of 115.00.
The short-term trend for the yen is bearish as it is now trading below the 21 SMA at 115.20 and below a downtrend channel formed since Feb 11. Any bounce towards this zone will be seen as an opportunity to continue selling JPY with targets at 4/8 Murray sitting around 114.06.
On the contrary, the first resistance for USD/JPY would be the daily high of February 25 at 115.75. A breakout of the latter would expose the level 116.00 followed by the yearly high at 116.35.
Our trading plan for the next few hours is to sell below 115.00, with targets at 5/8 Murray and towards 4/8 Murray around 114.06. The eagle indicator is showing a negative signal.
Support and Resistance Levels for March 01- 02, 2022
Resistance (3) 116.04
Resistance (2) 115.62
Resistance (1) 115.22
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Support (1) 114.69
Support (2) 114.45
Support (3) 114.06
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Scenario
Timeframe H4
Recommendation: sell below
Entry Point 115.00
Take Profit 114.45; 114.06
Stop Loss 115.40
Murray Levels 115.23(7/8), 114.84(6/8) 114.45(5/8), 114.06(4/8)
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