Current trend
Yesterday the pair slightly grew amid Fed Chair Janet Yellen speech, in which she noted a gradual recovery of the American economy and in particular of the banking sector. In addition, the Dollar was supported by strong data on Durable Goods Orders that exceeded forecasts of economists. At the same time, the Yen was pressured by poor data on Retail Sales that came out in Japan today. In August, the index fell by 1.1%, against a 1.5% growth in the previous month. Furthermore, Large Retailers’ Sales fell by 3.6% that was significantly worse than expectations.
Tomorrow attention also needs to be paid to data on the National Consumer Price Index, Unemployment Rate, Industrial Production, Housing Starts and Construction Orders in Japan.
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range is narrowing from the bottom. MACD is growing having formed a quite strong buy signal. Stochastic is quickly growing, moving away from the border of the oversold zone.
The indicators recommend long positions.
Support levels: 101.20 (local low), 100.93, 100.67, 100.44, 100.00 (psychologically important level), 99.53 (16 August low), 99.00 (24 June low).
Resistance levels: 101.48 (local high), 101.73, 102.00, 102.26, 102.45, 102.78 (21 September high), 103.00, 103.55 (14 September high), 104.00, 104.31 (2 September high), 104.82.
Trading tips
Long positions can be opened after the breakout of the level of 101.70 with targets at 102.70, 103.00, 103.30 and stop-loss at 101.30. Validity – 2-3 days.
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