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USD/JPY: technical analysis 17.12.19

Current trend

USD/JPY continues to consolidate in the side channel 109.485-109.671, after the breakdown of which, it is better to enter the market. If the "bulls" manage to raise the rate above the level of 109.671, the upward dynamic can continue to the area of 109.766. However, any attempted recovery seems more likely to get sold into aggressively near this region. Meanwhile, the breakout and consolidation of the price above it will give the prospect of growth to the new highs surrounding 110.000 resistance.

Alternative scenario

Should prices continue slipping under 109.485, the level of 109.375 might try activating an upward rebound. The breakdown and holding below will be a signal for downward trend formation and let the price decline to 109.287-109.180 support area. This zone seems like a “key” zone for the sellers. The decisive break of 109.180 is needed to indicate a downward trend resumption. In this case, the next targets of sellers will be the level of 108.984.

Technical indicators

The technical picture is mixed.

Bollinger Bands are pointed upwards.

MACD volumes are decreasing in the positive zone.

Stochastic is pointed downwards., forming a sell signal.

Support and resistance

Support levels: 109.485, 109.375, 109.180, 108.984.
Resistance levels: 109.671, 109.766, 110.000.

Trading recommendations

Short positions can be opened below the level of 109.375 with the target at around 108.984 and stop-loss at 109.505.
Long positions can be opened above the level of 109.671 with the target at around 109.765-110.000 and stop-loss at 108.660.

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