USD/JPY continues to rise for the 6th consecutive day on Monday after finding support around the 147.00 mark last week. Considering the upcoming events this week, investors are not rushing to open long positions on the dollar despite fairly positive macroeconomic statistics from the USA and resurging inflation.
USD/JPY remains in bullish market territory: short-term—above support levels of 148.45 (200 EMA on the 1-hour chart), 148.70 (200 EMA on the 4-hour chart); medium-term—above the key support level of 145.70 (200 EMA on the daily chart); long-term—above the key support level of 130.30 (200 EMA on the weekly chart). Thus, long positions above support levels of 148.75 and 148.45 remain preferable.
From a technical point of view, further price growth towards recent highs near the 151.00, 152.00 marks should be expected.
In an alternative scenario, a breakout of the "round" level of 149.00 will be the first signal for the resumption of short positions, and a breakout of support levels of 148.70 and 148.45 will confirm this. Much will depend on the decisions of the Bank of Japan and the Federal Reserve.
If the Bank of Japan does indeed announce the end of the cycle of negative interest rates, and the rhetoric of accompanying statements by Federal Reserve officials is perceived by investors as "dovish," then a breakout of key support levels of 146.00, 145.70, and a deeper decline in USD/JPY towards key long-term support levels of 134.60, 131.00, 130.30 cannot be ruled out.
For now, in the primary scenario, we expect the rise of USD/JPY while also not excluding corrections to support levels of 148.45 and 148.00.
The most aggressive market entry, in this case, can be considered buying at market with targets at 150.00, 151.00, 152.00 marks.
Support levels: 149.00, 148.75, 148.45, 148.00, 147.00, 146.90, 145.70, 144.70
Resistance levels: 150.00, 151.00, 152.00
Trading Scenarios
Buy at market, Buy Stop at 149.50. Stop Loss at 148.40. Take-Profit at 150.00, 151.00, 152.00
Sell Stop at 148.40. Stop Loss at 149.10. Take-Profit at 148.00, 147.00, 146.90, 145.70, 144.70
