This week, key data that can determine the pair’s further movement is due. On Wednesday, the US Fed is holding the meeting, where, as expected, the regulator will raise its interest rates. And on Friday, the Bank of Japan will announce its decision on interest rates and monetary policy in the country.
Today’s data from Japan showed Industrial Production growth of 1.4%, while the Tertiary Industry Index came out above forecasts, at +0.9%. Therefore, quite strong data that comes out in Japan lately supports the Yen.
Support and resistance
The pair remains within an ascending channel on the daily chart, while the downward correction in the pair stopped near the strong support level at 120.60 (61.8% Fibonacci correction, EMA200 and lower border of the ascending channel).
Most likely, until the end of the week the pair will remain in the range between the levels of 120.60 and 121.35 (ЕМА144 on the daily chart), 121.50 (50% correction).
After that the growth will resume towards 122.00 (ЕМА50 on the daily chart), 122.30 (ЕМА144 on the 4-hour chart), 122.50 (38.2% correction), while a breakout of the level of 123.70 (23.6% correction) would resume an upward trend in the pair.
On the daily chart, OsMA and Stochastic recommend sales, while on the 4-hour chart the indicators start turning to purchases.
Support levels: 120.60, 120.00.
Resistance levels: 121.35, 121.50, 122.00, 122.30, 122.50.
Short positions can be opened after the breakdown of the level of 120.66 with the target at 119.00 and stop-loss at 121.00.
Long positions can be opened from the level of 122.00 with the target at 124.40 and stop-loss at 121.30.