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USD/JPY: technical analysis 14.01.20

Current trend

On the 4-hour chart, the price has tested the resistance level of 109.941 and was slightly corrected downwards, but the general upward trend still maintains. One may speak about upward movement continuation after the price consolidates above the resistance level of 110.208. In this case, the next targets of buyers will be the level of 110.328-110.547. Judging by the downward reversal of the Stochastic, this scenario seems less likely.

Alternative scenario

The pullback below 109.905 will be a sign of downward correction formation and let the price fall to the 109.766 support level. The further close below this level may push USD/JPY to 109.627 support. This level is coincided with the middle line of Bollinger Bands and will be a key target of the downward correction.

Technical indicators

Technical indicators mostly keep a buy signal, but the downward correction is possible in the short term.

Bollinger Bands are diverging on the background of bullish momentum.

MACD is growing in the negative zone.

Stochastic has left the overbought area and is pointed downwards, reflecting the high possibility of the downward movement formation.

Support and resistance

Support levels: 109.905, 109.766, 109.627.
Resistance levels: 110.115, 109.328, 110.547.

Trading recommendations

Short positions can be opened below the level of 109.905 with the target at around 109.766-109.627 and stop-loss at 109.997.
Long positions can be opened above the level of 110.208 with the target at around 109.328-110.547 and stop-loss at 110.095.

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