|S1: 109.10||R1: 110.25|
|S2: 108.75||R2: 111.20|
|S3: 108.20||R3: 114.00|
The USD/JPY has started to consolidate after its strong start to the week, pulling back off its highs to around the 112.80 level.
We would expect this pair to remain in a tight trading range for the next 24 hours, fluctuating around 50 to 80 pips until the release of the key US data on Friday night.
The daily chart above shows the stochastic oscillator consolidating at close to the middle of the range, mimicking the price action of the last 48 hours.
The 1-hour chart paints a similar picture, but as the stochastic signal line is closer to the oversold area, we could see this pair gravitate up in the next 24 hours to around the recent highs of 113.20.
Traders should keep an eye out for Fed Chair Yellen’s speech and the US Unemployment Claims tonight, ahead of the Non-Farm Employment Change data tomorrow night.
Favourable numbers could see the USD/JPY move towards the key resistance level at 114.00 quite quickly, and reinforce the strong upward momentum from last week.