Today we would look at the USD/JPY pair where we expect some announcements that could increase volatility for the day. Currently the pair is flirting with levels around 109, but we do not expect it go beyond that. The long-term 50% Fibonacci level is located just above at 110; it holds much attraction for traders but if they become overly active around it, they will drive the prices down instead of up. That is why we predict the pair will be mostly bearish. We believe that 110.00 is a strong resistance for the pair and it most probably won’t be overcome. That is why we need to keep our eyes on the support levels at 109.74 and 109.52 for now. However, the USD/JPY is a pair prone to sudden changes - if for some reason it manages to rally above 110.00, then we can start buying it.
There are many announcements today that could affect the USD/JPY’s movement. From Japan we expect a GDP price index report, bank lending, quarterly GDP data and more. At the same time, the United States is also releasing reports regarding unemployment and gas resources. If the data is in any way surprising, then the pair might surprise us in turn too.
