Since the begging of this week, the pair remains in consolidation and trading in the range of 120.20-120.65.
The pair is pressured by the Bank of Japan decision to expand its economy stimulation program and some overbought in the USD. This tendency is likely to remain in the beginning of 2016.
Until the end of 2016, market volatility is expected to stay low due to a fall in trade volumes. On Thursday, attention needs to be paid to data on Initial and Continues Jobless Claims in the US.
Support and resistance
Pair’s fall along a wide descending channel should be considered in the medium-term. At the beginning of the next year, the price can decline to the levels of 118.60, 118.00 (lower MA of Bollinger Bands on the weekly chart), 116.20 (lower border of the channel).
MACD’s histogram is in the negative zone and its volumes are growing that indicates a fall continuation in the pair.
Support levels: 120.40, 120.00, 119.00, 119.40, 119.00, 118.20, 117.00, 116.20.
Resistance levels: 120.75, 121.30, 121.60, 121.85, 122.10, 122.50, 123.00, 123.75.
Open short positions from current prices with the target at 118.00 and stop-loss at 122.00.