The pair USD/JPY reached psychologically important area between 124.50 and 125.00. However, considering local strengthening of some other currencies against the USD, there possible a short-term flat or downward correction in the pair.
Important news that need to be watched this week include Trade Balance for May and Foreign Investments for July in Japan on Thursday, Markit Manufacturing PMI for July and New Home Sales for June in the US.
According to fundamental factors, the pair is set to continue growing.
Support and resistance
Some short-term consolidation is expected in the pair before it continues farther growth towards 126.00 and 135.00 (February 2002 high).
On the 4-hour and daily charts, Stochastic remains in the sell zone.
MACD histogram is falling on the daily chart and give a sell signal on the 4-hour chart.
Support levels: 124.10, 123.50, 123.15, 122.00, 121.60, 120.70.
Resistance levels: 124.50, 124.80, 125.00, 125.50.
Because of the anticipated short-term correction, open short positions from 124.40, 124.50, 124.80with targets at 124.00, 123.50, 123.20 and stop-loss at 125.25.
Pending buy orders can be placed from the levels of 123.10, 122.80, 122.40 (with appropriate indicators signals) with stop-loss at 121.80.
Short positions can be opened after the breakdown of the level of 122.35 (with appropriate indicators signals) with targets at 122.00, 121.60, 120.70.