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USD/JPY: technical analysis 04.10.2019

Current trend

USD/JPY continues to consolidate in the side channel after a significant decline over the past three days. In order to continue the downward movement USD/JPY must set below 106.741 level. In this case the retest of the support level of 106.641 is possible. This level can activate an upward rebound. Meanwhile, the brealdown and pair’s sustained trading below this level will let USD/JPY fall to the level of 106.478 (Murray [1/8]).
Alternative scenario. If the "bulls" manage to raise the rate above the level of 106.961, the correction can continue to the area of 107.031 (Murray [2/8])-107.119. The breakout of 107.119 can accelerate the pair towards 107.228. Technical indicators mostly keep a sell signal. Bollinger Bands are pointed downwards. MACD histogram is in the negative zone keeping a signal for the opening of sell positions. Stochastic is pointed downwards.

Support and resistance

Support levels: 106.741, 106.641, 107.478.
Resistance levels: 106.961, 107.119, 107.228.

Trading recommendations

Long positions can be opened above the level of 106.961 with the target at around 107.119-107.228 and stop-loss 106.872.
Short positions can be opened below the level of 106.741 with the target at around 106.641-107.478 and stop-loss 106.828.

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