In the end of October and the beginning of November, the pair significantly strengthened but after entered a consolidation that continues until now.
This week the pair was supported by poor macroeconomic data on the construction sector and major indices from Japan. However, after the publication of yesterday’s data on the ISM Manufacturing PMI in the US that came out significantly worse than forecasts, the pair declined.
During the week, attention needs to be paid to the labour market statistics and Factory Orders in the US, and Fed’s Chair Janet Yellen Speech.
Support and resistance
Since the first half of November, the pair is trading within a narrow sideways channel between the levels of 123.75 and 122.10 in which it is likely to remain in the short-term.
In the medium-term, a growth towards the level of 124.75 and a following downward correction towards 118.00, 117.00 is expected.
MACD is in the positive zone and its volumes are growing that confirms an upward movement in the pair.
Support levels: 122.50, 122.10, 121.80, 121.30, 120.75, 120.25, 119.40, 118.60, 118.00, 117.00.
Resistance levels: 123.00, 123.75, 124.10, 124.75, 125.50, 125.70.
Open long positions from current levels and from 122.50 with the target at 124.75 and stop-loss at 121.60