USD/JPY Testing Consolidation Range Upper Border

USD/JPY (daily chart as of November 7, 2013) tentatively surpassed the upper border of the large consolidation range (blue narrowing lines on chart) that has been in place for over five months. If the pair can continue the upside momentum, price could test 100.00/60 or the medium-term uptrend line (green line on chart) that has served as support and resistance within the consolidation range. We can see that the line acted as resistance on both October 16 and 17 (red arrow on chart).

Price needs to clear the strong resistance of 101.50 to challenge the key 103.70 high and potentially to resume the prior uptrend. If price is unable to surpass 103.70, more consolidation may be expected ahead. Upcoming event risk is tomorrow’s non-farm payrolls data for October, which is expected to be weak and distorted due to the partial government shutdown.

Support levels below:

1st support: 97.80 (November 1 low) or the lower edge of the consolidation range

2nd support: 96.50 (October 8 low)

3rd support: 95.80 (August 8 low) or the daily EMA 200

Resistance levels above:

1st resistance: 100.60 (September 11 high)

2nd resistance: 101.50 (July 8 high)

3rd resistance: 103.70 (May 22 high)