The USD/JPY pair ended last week near the level of 120.00 that it has been testing for few months now.
The USD during last week was under pressure from poor labour market data from the US and a number of other weak macroeconomic publications.
The Yen, on the other hand, was pressured by the statement from the Bank of Japan that made it clear it could apply additional stimulus measures to support the national economy that remains very weak according to the latest data.
Support and resistance
Bollinger Bands on the daily chart is moving horizontally, while the price range remains narrow. MACD is growing and giving a weak buy signal. Stochastic bounced off the overbought zone and moving downwards.
The indicators recommend waiting for clearer trading signals.
Support levels: 120.00 (psychologically important level), 119.62, 119.39, 119.05, 118.67 (2 October low), 118.24 (25 August low), 117.00, 116.19 (24 August low).
Resistance levels: 120.34 (local high), 120.56 (6 October high), 121.00, 121.32 (10 September high), 121.73, 122.00.
Long positions can be opened after the breakout of the level of 120.73 with targets 121.73, 122.00 and stop-loss at 120.50. Validity – 2-3 days.
Short positions can be opened after the breakout of the level of 119.90 with targets at 119.20, 118.90 and stop-loss at 120.40. Validity – 2-3 days.