USDJPY Forex Forecast – Eyes on Range Resistance!
By Samuel RaeUSDJPY has been moving sideways on the short-term time frames, still waiting for more catalysts to spur a trend in either direction. At the moment, price is approaching the top of its range around the 123.75 level.If this area continues to hold as resistance, a move towards the bottom of the range at 122.40 might take place. On the other hand, a long green candle closing above the range resistance could signal that further gains are in the cards. The rectangle is approximately 135 pips in height so any breakouts could yield the same amount of pips in gains or losses.The 100 SMA is above the 200 SMA so the path of least resistance is to the upside. However, stochastic is already indicating overbought conditions so it’s likely that the top of the range might still hold as a ceiling. Similarly, RSI is nearing the overbought area so a return in selling pressure might be seen.
USDJPY Fundamental FactorsEvent risks for this setup include the US NFP release on Friday, as this could make or break the case for a December Fed liftoff. Although market expectations favor a rate hike in the next FOMC meeting, a very downbeat figure could still bring more uncertainty to the mix and spur losses for the US currency.Earlier this week, data from Japan came in mixed, as retail sales beat expectations with a 1.8% gain while the preliminary industrial production report came up short with just a 1.4% increase. According to BOJ Governor Kuroda, additional stimulus isn’t necessary to ward off deflation and boost economic growth.To contact the reporter of the story: Samuel Rae at [email protected]