Since the beginning of today’s session, the pair significantly strengthened recovering some of the losses of this week. Earlier, the pair was pressured by poor macroeconomic data from China, growing tensions in the Middle East and the FOMC Minutes that expressed regulator’s concerns regarding inflation growth in the US. At the same time, today the pair was supported by poor macroeconomic data from Japan. Labour Cash Earnings for November showed no growth while experts expected a 0.7% growth, and the Leading Economic Index fell from 104.2 to 103.9 points.
Today attention needs to be paid to the labour market data from the US.
Support and resistance
Bollinger Bands on the daily chart is moving down while the price range remains wide. At the same time, the indicator formed a signal for correctional growth. MACD is trying to turn up while keeping a sell signal. Stochastic is in the oversold zone and also trying to turn up, indicating a possibility of an upward correction.
The indicators recommend waiting for clearer trading signals.
Support levels: 118.00 (local low), 117.32 (yesterday low), 117.00, 116.19 (24 August low).
Resistance levels: 118.24 (local high), 118.67, 119.05, 119.39, 119.69 (5 January high), 120.00 (psychologically important level), 120.16, 120.56.
Long positions can be opened after the breakout of the level of 118.67 with targets at 119.50, 120.00 and stop-loss at 118.00. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 118.00 with the target at 117.00 and stop-loss at 118.70. Validity – 2-4 days.