This week the USD/JPY pair is consolidating in a narrow sideways channel after a significant growth in the end of the last week. Low volatility in the pair is likely to be caused by the absence of important publications from the US and Japan.
The pair is supported by recent poor macroeconomic data from Japan and expectations of an interest rate hike in the US in December.
In the end of this week, attention needs to be paid to the labour market data, Retail Sales and key indices in the US, and Industrial Production in Japan. In addition, it is worth following the publication on the Japanese GDP that is due at the beginning of the next week. According to forecasts, the Japanese economy will continue shrinking for the second consecutive quarter.
Support and resistance
The most likely scenario is the growth continuation in the pair, possibly from current levels, and towards 125.25 (upper border of an ascending channel) and 125.75 (June highs).
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 prices with targets at 125.50, 126.25 and stop-loss at 121.80.