The USD/JPY grew at the beginning of the week reaching a 3-week high at 120.26. However, by Wednesday the pair had lost some positions and the price is currently located at 119.60. The quotes are likely to remain within a range of 119.35-119.70 as market participants are waiting for fundamental news of the week: ECB President Mario Draghi's statement and publication of February's economic statistics for the US labour market.
It's worth noting that the pair has been long testing a resistance level of 120.00 but can't hold above. In the meanwhile, the Bank of Japan refrains from further stimulation measures fearing that the economy will overheat. The market therefore has no incentives for overcoming this barrier.
Support and resistance
Technically, the price has dropped below the middle line of the Bollinger bands, which will probably allow the pair to decline further to a level of 119.35. At the same time, a breakdown of the level 119.70 may lead to a slight growth to a level of 120.10. Technical indicators are producing opposite signals. Bollinger bands have started to narrow. The MACD histogram is in the positive zone and its volumes are decreasing. Stochastic lines reversed upwards.
Support levels: 119.35, 118.95, 118.50.
Resistance levels: 119.70, 120.10.
This situation rather implies short positions that can be opened at current price with the target at 119.35. Long positions with a target of 120.10 should be opened in case the price breaks down a level of 119.70.