After the second wave of reduction the pair USD/JPY moved to the consolidation stage and has been trading in the lateral channel for five days.
Coniderable upward correction is explained by the growth of investor demand for USD in view of positive data from the US labor market in the beginning of the current week and comments on the possibility of two increase of FOMC interest rates this year.
This week the traders are waiting for important releases from the USA and Japan that may impact the movement tendency. FOMC decision on the interest rate and the economic stimulation program will be published on Wednesday. The toughening of measures will lead to growing demand for USD and further considerable increase of the US currency rate. If the increase of the interest rate and winding up of stimulation measures is postponed, the US currency may become the target of sales once again. Moreover, the data on the inflation, key indexes, and US industrial output are to be released. Japan will respond with its data on production output and interest rate decisions. Special attention should be paid to the follow-up comment of the Open Markets Committee. Verbal support may have good influence on the rate of USD.
Technically the pair remains in the downward channel which indicates low possibility of USD dropping against yen. In case the levels of 110.50, 110.80 are broken through, the way upward will be opened, and the possibility of change in the tendency will be high. Technical indicators don't provide a clear signal: MACD signal line is on the zero level, and Bollinger Bands are aligned in parallel to each ther which may indicate equal posibility of all scenarios.
Support levels: 110.95, 109.85, 109.50, 109.20, 108.75, 108.10, 107.30.
Resistance levels: 110.50, 110.80, 111.15, 111.45, 111.90, 112.40, 113.75.
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