The current trading session started with a jerk when the USD/JPY tried to consolidate above a level of 119.00. But then the pair slumped after the opening of the American session. Today, the pair managed to drop below a level of 118.00, but promptly moved back and is trading at about 118.40.
The economic calendar suggests that the day will be calm and the pair is likely to be trading within a range of 18.00-119.00. The US retail sales index and consumer price index will be published on Thursday and Friday, respectively. The forecasts for both indexes are quite gloomy, which can drop the pair below a level of 118.00.
From technical point of view, the pair has a good chance of growing. Stochastic is in the oversold zone and produces a strong signal to buy. MACD is in the negative zone, but if the volumes start decreasing and the signal line reaches beyond the limits of the histogram and moves upwards, there will be a signal to buy.
Support and resistance
The nearest resistance level is at 118.65 coinciding with 50% Fibonacci retracement.
The following levels: 119.00, 119.30, 119.75.
Support levels are at 118.05 and 117.75.
Buy above 118.65 and 119.30 with a target at 119.75. Short positions should be opened in case the price consolidates below the level of 119.70 with the nearest target at 117.90.Publication source