For almost two months the USD has traded in the range of 118.60-120.70 against the Japanese Yen. Last week, the pair rebounded from the key resistance level of 120.40 and went up. Last Thursday, favousrable US data on initial and secondary applications for unemployment benefits became known. These indices provided support to the USD and on Friday the pair wad able to reached the key support level of 120.10. However, due to weak Non-Farm Payrolls the pair reversed from this level and went down.
Today, the pair USD/JPY is traded sluggishly amid the lack of macro-economic releases. It is likely that the pair will continue to trade in the narrow range of 119.40-120.10. In future, the Japanese Yen is expected to strengthen due to favourable key indices. In addition, on Wednesday, Japanese GDP will become known. The demand for the USD will continue to decline and negative data on retail sales can only worsen the situation.
Support and resistance
In the medium-term the pair will go down to the key support level and the local lows of the past month and a half at the level of 118.60. Breakdown of this level can open the way to 118.00 and 117.10.
Support levels: 119.65, 119.40, 119.10, 118.60, 118.00 and 117.10.
Resistance levels: 120.10, 120.40, 120.70, 121.80, 122.10 and 122.50.
It is recommended to open short positions from the key resistance levels with taking profit at the level of 118.60. Pending buy orders can be placed from the bottom limit of the channel with the short stop-loss and take profit of 120.10.