The USD/JPY pair started the week with a growth. At present, the Yen is under pressure from falling imports and exports to China, and the weakening Japanese stock market. On the other hand, investors are interested in the USD prior to the September Fed meeting, where the regulator can make a decision on the interest rate hike. Thus, a further growth in the pair seems probable.
There are no important news today. On Thursday, attention needs to be paid to Machinery and Machinery Tools Orders in Japan and the Consumer Price Index in China.
Support and resistance
On Tuesday, the pair broke out the level of 120.00 (23.6% Fibonacci) and continues growing towards 121.00 (38.2% Fibonacci), the breakout of which would allow the pair to grow to 121.30 and 121.80 (50% Fibonacci). However, a fall towards 120.00 and 119.50 (the middle MA of Bollinger Bands) can resume, especially if positive macroeconomic data comes out on Thursday.
Technical indicators are giving controversial signals. Bollinger bands starts widening confirming an upward trend. MACD histogram entered the positive zone and formed a buy signal. Stochastic is leaving the overbought zone, thus giving a sell signal.
Support levels: 120.00, 119.50.
Resistance levels: 121.00, 121.30, 121.80.
Open long positions from the current levels with targets at 121.00, 121.30 and stop-loss at 120.10.
Short positions can be opened after the price consolidation below the level of 120.00 with the target at 119.50 and stop-loss at 120.40.