USD/JPY Current price: 110.87
Last week, not even the NFP was enough to move the pair away from the 111.10 – 110.70 area. On Monday, USD/JPY is likely to post the sixth consecutive daily close in that range. Today the US dollar opened the week extending Friday’s rally, but below the 20-day moving average (111.60/65), lost strength and retreated. It dropped back under 111.00.
In the short-term, it continues to move sideways, without a clear trend and without strong signals. A consolidation on the coming hours below 110.85 (20-SMA in 4-hour charts) could lead to a decline to 111.50; below that area, attention would turn to the key barrier located around 111.00/10, that capped the slide during the previous two weeks. A break lower could send volatility higher in the market, boosting the yen. The US dollar needs to regain 111.50 in order to gain support to extend gains while a consolidation on top of 112.00 would point to further gains the greenback.
Support levels: 111.85 111.50 111.10
Resistance levels: 111.60 112.00 112.25