USD/JPY is expected to trade with a bearish outlook. The pair retreated from 112.75 and broke below its 20-period and 50-period moving averages. In addition, the 20-period moving average crossed below the 50-period one. The relative strength index is showing downside momentum.
To conclude, as long as 112.35 is not surpassed, look for a further drop to 111.60. A break below this level would trigger a new decline to 111.20.
Alternatively, if the price moves in the opposite direction, a long position is recommended above 112.35 with a target at 112.50.
Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.
Strategy: BUY, Stop Loss: 112.35, Take Profit: 111.60
Resistance levels: 113.30, 113.75 and 114.15 Support Levels: 111.60, 111.20, 110.80