The US dollar returned to decline in a pair with the Japanese yen, again preparing to test support at the level of 110.00 for a breakdown down. Last week, the US currency managed to record not the most confident upward dynamics, which was caused by low demand for risk amid concerns about the increase in the incidence of coronavirus in certain regions of the world.
USD/JPY Dollar Yen forecast for today and July 27 - 28, 2021
The macroeconomic statistics published last Friday from the United States noticeably cooled the ardor of the "bulls". Thus, the index of business activity in the services sector from Markit in July fell from 64.6 to 59.8 points, while analysts expected a further increase in the indicator to 64.8 points. The index of business activity in the manufacturing sector in July rose from 62.1 to 63.1 points, which was better than analysts ' forecasts at 62.0 points.
Investors are waiting for the speech of the head of the Bank of Japan Haruhiko Kuroda, which will be held tomorrow. It is likely that the regulator will adjust its economic forecasts for the near future, although no changes in monetary policy are expected.
Support and resistance levels
The Bollinger bands on the daily chart show a reversal in the horizontal plane within the forex forecast. The price range narrows slightly from above, reflecting the appearance of mixed trading dynamics in the short term. The MACD indicator is growing, maintaining a weak buy signal (the histogram is located above the signal line). Stochastic, having reached its maximum values, signals in favor of the development of a corrective decline in the ultra-short term.
Resistance levels: 110.38, 110.68, 111.00, 111.34.
Support levels: 110.00, 109.59, 109.29, 109.00.
Trading Scenarios
Thus, USD/JPY Dollar Yen forecast for July 27-28, 2021 to open short positions, you can rely on a confident breakdown of the 110.00 level down. Take profit — 109.29. Stop loss — 110.38. Implementation period: 2-3 days.
A breakdown of the level of 110.68 up may be a signal to return to purchases with the goal of 111.34. Stop loss — 110.38.