Current trend
The pair growth, started this Tuesday, continued on Wednesday. Despite some interesting macroeconomic statistics, released in Japan, the yen fails to start a steady upward movement.
On Wednesday Retail Sales rose by 0.9% at an annual rate in June which is 0.4% higher than expected. However, in monthly terms, the volumes of sales fell by 0.8% against the 1.7% growth in the previous month.
Fed voted to keep the current level of its interest rate and, at the same time, positively assessed the results of housing and labor markets recovery. This decision did not significantly influence the pair dynamics.
Support and resistance
Bollinger Bands on the daily chart indicate a forthcoming medium-term flat. The middle MA has turned sideways. The price range has narrowed.
MACD, after a brief decline, turned upwards again and formed a buy signal (the histogram is above its signal line). The indicator supports short-term and very short-term long positions.
Stochastic line is approaching the border of the overbought zone which may indicate weakening of the bullish impetus at the end of the week.
Support levels: 123.56 (the middle line of the medium-term flat channel), 123.00 (July 27 local low), 122.60, 122.00, 121.57, 121.00 and 120.41 (July 8 low).
Resistance levels: 124.00, 124.17 (current daily high), 124.47 (July 21 local high), 125.00.
Trading tips
After the breakout of 124.17 open long positions with the first target at 124.47. When this level is overcome, the pair may grow further to 125.00. Stop-loss should be set at 123.00.
Alternatively, the pair may start a strong downward movement and break through 124.00 or bounce off this level. Set take-profit at 123.00 and stop-loss at 124.47.
