The USD/JPY pair remains volatile amid the publications of controversial macroeconomic statistics both in the USA and Japan. At the same time, the price is near two-month highs.
Last Friday, the USA failed to release positive Employment statistics for July. However, no significant negative response followed, so, on Monday, the US dollar managed to strengthen against the weak yen.
On Monday, Japan released Current Account statistics. In June the indicator grew by 557.7 billion yen, which is about 200 billion less than expected. In the first half of this year, the account surplus stood at 8.18 trillion yen.
Support and resistance
Bollinger Bands on the daily chart keeps weak upward dynamics. The price range is widening. Due to the USD growth, seem on Monday, the indicator cancelled its recent sell signal. Wait for a clearer situation.
MACD histogram is growing slightly, but the indicator is still giving a sell signal (the histogram is below the signal line). Wait for a “bullish” signal to be formed.
Stochastic did not react to the USD growth and continues declining steadily. Short-term sell positions are worth considering.
Support levels: 124.57 (the middle line of the short-term flat), 124.26-124.00 (the lower border of the flat channel), 123.51, 123.00 (27 July low), 122.60, 122.00, 121.57, 121.00 и 120.41 (8 July low).
Resistance levels: 125.00 (strong mark near current local highs reached on 7 August), 125.40, 125.85 (5 July local high), 126.00.
Open long positions when the price breaks out and bounces off 125.00. Set take-profit at 126.00 and stop-loss at 124.26.
If the price fails to overcome 125.00, it may bounce down from this level. Set take profit at 124.00 and stop-loss no further than 125.85.