USD/JPY (daily chart as of June 4, 2014) has traded higher since the potential bullish engulfing pattern (gray shadow on chart) formed on May 20 and 21, mentioned in our previous analysis. Price is now once again facing the key resistance zone of 102.70-102.85.
With the medium-term downtrend line (bold red trend line) approaching the resistance zone, it could create a strong barrier ahead. We require strong price action with follow-through to confirm any major breakouts.
The pair could form another cluster (red shadows) below 102.70-102.85 if it stalls at the resistance confluence. In the event that price breaks out above the strong resistance, it could trade higher to test the 103.75/104.10 area again.
Current price is still trading in a large triangle range between the 200-day EMA and the medium-term downtrend line. In the meantime, it appears that the pair is also trading in a large rectangle range between 101.30 and 103.75 (bold blue lines).
The ADP Employment Change report earlier this morning showed fewer US new jobs added in May – 179K versus 210K forecasted. US Non-Farm Payrolls data is scheduled for Friday, June 6.
Support levels below:
1st support: 102.10 or 100-day EMA
2nd support: 200-day EMA
3rd support: 100.75 (May 21 low)
1st support: 102.10 or 100-day EMA
2nd support: 200-day EMA
3rd support: 100.75 (May 21 low)
Resistance levels above:
1st resistance: resistance confluence
2nd resistance: 103.75/104.10
3rd resistance: 104.80 (January 22 high)
1st resistance: resistance confluence
2nd resistance: 103.75/104.10
3rd resistance: 104.80 (January 22 high)
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