In the early American session, the USD / JPY pair is trading below the SMA of 21 and above the EMA of 200, enclosed within a range between 109.75 and 109.00. The price is likely to remain trading sideways within this zone.
The pair has strengthened on Friday due to weaker-than-expected US employment, that gave it bearish strength to consolidate below the SMA of 21. As the USD / JPY pair is also a safe haven asset, investors are selling the pair exclusively on a cautious sentiment in the stock markets.
The 109.00 zone is giving immediate support to the pair as investors in Japan remain concerned about an extension of the state of emergency in Tokyo that could hamper Japan's fragile economic recovery. This could become another factor that could offer some support for the USD / JPY pair, with a technical bounce occurring in the next few hours.
The key level to watch is 109.00 as the EMA of 200 is located there. We should expect a consolidation below this zone for new sales, with targets in the 108.20 zone. Therefore, it will be wise to wait for a solid follow-up to sales before positioning for any further bearish movement.
On the contrary, a bounce in the 109.03 zone will be a good opportunity to buy with targets at the 21 SMA around 109.75. Alternatively, if the pair trades above 4/8 of a murray we can buy. Both levels act as immediate support for the pair.
The technical reading of the eagle indicator is showing that the pair is moving away from the overbought zone, and further bullish momentum could occur, if the pair sustains above the key 109.00 level.
Our recommendation is to buy the USD / JPY pair, when it reaches the 200 EMA zone, (109.03) level of a probable technical rebound.
Support and Resistance Levels for June 07 – 08, 2021
Resistance (3) 110.37
Resistance (2) 109.71
Resistance (1) 109.35
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Support (1) 109.13
Support (2) 108.71
Support (3) 108.50
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Trading tip for USD/JPY for June 07 - 08, 2021
Buy if rebound 109.03 (EMA 200), with take profit at 109.37 and 109.76 (SMA 21), stop loss below 108.65.
Sell if pullback 109.76 (SMA 21), with take profit at 109.35 and 109.03 , stop loss above 110.10.