As expected, this week the pair had tested the level of 125.00; however it failed to go above this level rand rolled back to 124.90 (opening price of this week). During trading on Wednesday the USD strengthened due to the reduction in the trade balance deficit in the USA by almost 10 billion versus the previous level. Now the pair is traded at the level of 124.50.
On Thursday, volatility in the market is expected to be moderate and important macroeconomic statistics, which can affect movement direction in the pair UDS/JPY, is not expected. On Friday, investors shall focus attention on the US unemployment report: according to the preliminary data this index will remain unchanged at the level of 5.4% and this fact can have a positive impact on the USD.
Support and resistance
On the daily chart moving average lines with the periods 20, 50 and 100 are below the price line and directed upward, confirming current uptrend. MACD histogram is in the positive zone; its volumes are rapidly increasing, which also confirms probability of the upward movement.
The nearest support level is 123.71 (this week lows). Next support levels: moving average lines with the periods 20, 50 and 100 (122.72, 121.36 and 120.01 respectively). Strong resistance level: 118.86 (lows of the past three months) and 125.00 (important psychological level).
It is recommended to open buy positions at the current price with the target of 125.00-125.50 and stop-loss at 123.70.