For more than a month, the USD/JPY pair has been trading within a contracting triangle between the levels of 121.30 and 119.00. Today, the pair grew and broke out a resistance level at 120.10.
It is worth noting that this week the USD was falling against its major competitors but the USD/JPY pair has barely reacted to the USD weakening. It shows that the Yen cannot strengthen against the USD even on negative news from the US and amid fall in demand for the Dollar.
Today, attention needs to be paid to data on Wholesale Inventories and the Import Price Index from the US.
Support and resistance
Most likely, the price is going to break out from the triangle in the near future. The main scenario is that the price breaks upwards and grows to the key resistance level at 123.00. If the price breaks down, the pair could fall to end of August lows at 116.20.
MACD is turning upwards.
Support levels: 120.10, 119.80, 119.40, 119.20, 119.60, 118.00, 117.10, 116.20, 115.50.
Resistance levels: 120.25, 120.40, 120.75, 121.30, 121.80, 122.10, 122.50, 123.00.
Pending buy orders can be placed at the level of 121.50 with the target at 123.00 and stop-loss at 120.90.
Pending sell orders can be placed at the level of 118.50 with the target at 116.50 and stop-loss at 119.40.