After a technical correction to the 61.8% Fibonacci level, the USD/JPY pair is strengthening again, preparing to update the July maximum in the long term.
USD/JPY dollar yen forecast for today and July 22-23, 2021
The fundamental background favors the growth of the US dollar, which is strengthened due to investors' expectations for an early tightening of the US Federal Reserve's monetary policy, as inflation in the country rose by 5.4% in annual terms, which is a record since the global economic crisis of 2008.
The yen is under the influence of negative factors. A state of emergency has been introduced in Tokyo, which will last until August 22, but the number of people infected with the new strain of the delta coronavirus is growing. Local spectators will not be allowed to attend the Olympic Games. In addition, inflation in Japan is at a very low level: the basic consumer price index in annual terms is 0.2%, and in monthly terms the indicator increased by 0.3% in June. Such low inflation does not allow the Bank of Japan to think about reducing quantitative easing and tightening monetary policy.
Support and resistance levels
The long-term trend is upward, and after a technical correction, the instrument strengthens within the framework of the forex forecast. The growth goal is to update the July maximum. The nearest supports from which you can consider buying are at the levels of 109.69 and 109.22.
The medium-term trend is also directed upwards to the target zone 2 (112.55-112.30). This week, market participants tested the key trend support in the area of 109.65–109.45. The zone was held, and now there is a natural price increase to the nearest target at the resistance level of 110.62.
Resistance levels: 111.05, 111.53, 112.06.
Support levels: 109.69, 109.22, 108.57.
Trading Scenarios
Thus, USD/JPY Dollar Yen forecast for July 22-23, 2021 long positions can be opened from the level of 109.69 with a target of 111.05 and a stop loss in the area of 109.24. Implementation period: 7-9 days.
Short positions can be opened below the level of 109.22 with a target of 107.84 and a stop loss in the area of 109.82.