At the beginning of this week, the pair is consolidating in a narrow sideways channel after a sharp growth in the end of last week.
Pair’s growth was the result of strong data on the US labour market for October that exceeded forecasts of economists. The Unemployment Rate fell to 5%, while the Nonfarm Payrolls amounted to 271 thousands, instead of forecasted 180 thousands. The data significantly increased the chances of an interest rates hike in the US in December that will continue supporting the pair.
In the end of the week attention needs to be paid to data on Jobless Claims and Retail Sales in the US, and Industrial Production in Japan.
Support and resistance
The pair remains above the key support level at 123.00 and in an ascending channel with the upper border at 126.50.
The likeliest scenario is consolidation continuation until the end of the week. In the medium-term, however, the pair continues growing towards 125.50.
Main indicators confirm the growth continuation. On the weekly chart, the price broke out the middle MA of Bollinger Bands and growing towards the upper MA of the indicator at the level of 125.50. MACD is in the positive zone and its volumes are growing.
Support levels: 123.00, 122.50, 122.10, 121.80, 121.30, 120.75, 120.40, 119.50, 118.60.
Resistance levels: 123.75, 124.10, 124.75, 125.50, 126.00, 126.50.
Long positions can be opened from current levels and from 123.00, 122.50 with the target at 125.50 and stop-loss at 121.80.