The USD / JPY pair, in 4-hour charts, is trading below +2/8 of the murray zone of an imminent bearish retracement, and above the SMA of 21, showing a bullish bias, but approaching overbought levels.
In a few hours, NFP figures will be released in the US. If the data is favorable for the US dollar, the pair could gain bullish momentum to the 112.08 zone of strong resistance from price action.
In the chart above, we can see USD / JPY is slowing its upward momentum below +2/8 of murray (111.71). This level could be a barrier and prevent the pair from a further rise. The higher is the level of February 2020 at 112.08 which is strong resistance and a psychological level.
On the contrary, if the USD / JPY pair is below +2/8 of murray, the price could make a correction to the support of 8/8 of murray that coincides with the SMA of 21 located at 110.93.
The US dollar index is trading at 92.57, enjoying a week of strong momentum. The index is likely to make a correction tomorrow in case of worse-than-expected NFP data, or it will support its upward bias until it reaches the resistance of 92.98. If the NFP data is negative, the yen could fall to the 110.91 area.
The technical reading of the eagle indicator is showing a sign of overbought conditions, so an imminent correction is likely in the next few hours.
Support and Resistance Levels for July 02 - 05, 2021
Resistance (3) 112.34
Resistance (2) 111.98
Resistance (1) 111.72
----------------------------
Support (1) 111.35
Support (2) 111.12
Support (3) 110.76
***********************************************************
Trading tip for USD/JPY for July 02 - 05, 2021
Sell below 111.60 or in case of a pullback 111.71 (+2/8), with take profit at 111.32 and 111.60 (8/8), stop loss above 111.98.
