Outlook in USDJPY remains neutral at the moment, the pair is trapped within a tight range between 119.35 and 120.28 levels.
On the upside, resistance comes at the 120.28 levels, a break would open 120.90 levels. At this point I still expect strong resistance from the 120.90 levels to limit rise from the 118.32 levels, however; sustained breakout above the 120.90 levels should recapture the 122.00 levels, a halt is likely but a break would open 123.00 next, further upside will target the 124.16 levels.
On the downside, a failure to hold gains above the 120.90 levels could mean a return to the 119.35/118.50 levels, below 118.50 will open a main support at the 117.75, It’s the last support level on the daily time frame that protects rise from the 115.85 levels, however; a clear break below the 117.75 levels will bring a lower leg below the 115.85 levels and a free fall towards the 112.47 levels couldn’t be ruled out!!!!
In all, the USDJPY is likely to consolidate within 117.75/120.90 range, sustained breakout above the 120.90 levels on a daily closing basis is needed to get the pair out of the current range, If seen, It might expose 122.00 levels and target the 123.00/124.15 levels, below 117.75 will pave the way towards the 115.85 levels and possibly lower towards the 114.00/113.15 levels..
Support and resistance: 112.47, 113.15, 114.00, 115.57, 117.75 (main), 118.50, 119.70, 120.28, 120.90 (main), 122.00, 123.00, 124.15
Short term trend: Neutral (117.75/120.90)..
Medium term trend: Neutral (115.55/122.00) but under pressure..
Key data (events) which may affect USDJPY pair this week:
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Conclusion: Since the pair moves in a tight range, you need to keep an eye on the NEWS near support and resistance levels, the most important level that needs to be watched is 120.90, negative data under/around this level is likely to push the pair lower towards the 118.50/117.75 levels…….. Same thing with the key support 117.75, any positive data above/around the 117.75 levels should keep the pair within current range…..