FX.co ★ USD/JPY Technical Analysis and Trading Tips for December 19, 2022

Having opened today's trading day with a downward gap, during today's Asian trading session, USD/JPY continued to decline towards the long-term support level 135.20 (200 EMA on the daily chart) while remaining within the range of 135.20 and 137.75 (144 EMA on the daily chart) since the beginning of the month. Obviously, for further movement in one direction or another, the pair needs new drivers.

Above the levels of 132.80 and 135.20, the USD/JPY remains in a long-term bull market zone. This means that long positions are still preferable. In case of a breakdown of the upper border of the range and resistance level 137.75, USD/JPY will move towards resistance levels 139.16 (200 EMA on the 4-hour chart), 140.00 (50 EMA on the daily chart), 142.10 (local resistance level), and the first signal for the realization of this scenario can be a breakdown of the important short-term resistance level 136.58 (200 EMA on the 1-hour chart).

Alternatively, after the breakdown of the 135.20 support level, the nearest target is the 132.80 support level.

A breakdown of the long term support 132.80 (50 EMA on the weekly chart) increases the risk of breaking the pair's bullish trend. However, we would probably consider this scenario if the BoJ decides to cut its ultra-loose policy. In the meantime, and as we noted in one of our previous reviews, the divergence of the monetary policy of the Fed and the BoJ is likely to increase, creating preconditions for further growth of USD/JPY.

Support levels: 135.20, 132.80

Resistance levels: 136.58, 137.75, 139.16, 142.10, 145.00

Trading Tips

Buy Stop 136.65. Stop Loss 134.45. Take-Profit 137.00, 137.75, 139.16, 142.10, 145.00

Sell Stop 134.45. Stop Loss 136.65. Take-Profit 134.00, 133.00, 132.80