Yesterday, the US dollar shows moderate growth against the Japanese currency, recovering from a moderate decline during the last two trading sessions and preparing for another test of the 110.00 mark for an upward breakout.
USD/JPY dollar Yen forecast for July 19-20, 2021
The results of the Bank of Japan's interest rate meeting have a noticeable pressure on the yen's position. As expected, the regulator left the rate at -0.1%, which it first introduced in January 2016. In addition, the previous volumes of bond purchases were maintained, including additional purchases of commercial securities. It is also worth noting that the regulator has revised its own forecast for the country's GDP in 2021 downwards: at the moment, the Bank of Japan expects growth of only 3.8% y/y instead of the previous 4% y/y.
During the day, investors are waiting for the publication of June statistics on retail sales in the United States, which may help to further assess the level of inflationary pressure in the country.
Support and resistance levels
The Bollinger bands on the daily chart show a moderate decline within the forex forecast. The price range is expanding from below, freeing the "bears" the way to new local lows. The MACD indicator is declining, maintaining a strong sell signal (the histogram is located below the signal line), and is trying to gain a foothold below the zero mark. Stochastic shows a similar dynamics, with the only difference that the indicator line is approaching the minimum values, indicating the risks of oversold dollar in the ultra-short term.
Resistance levels: 110.00, 110.38, 110.81, 111.00.
Support levels: 109.52, 109.29, 109.00
Trading Scenarios
Thus, USD/JPY Dollar Yen forecast for July 19-20, 2021 to open long positions, you can rely on the breakdown of the 110.38 mark up. Take profit - 111.00. Stop loss - 110.00. Implementation period: 2-3 days.
The return of the "bearish" dynamics to the market with a breakdown of the level of 109.52 down may be a signal for new sales with a target of 109.00 and a stop loss of 109.80.