Currency in Play for Next 24 Hours

USD/JPY will be the currency in play on Monday. Japan will be releasing its leading indicators report at 1:00am ET or 5:00 GMT while the U.S. is expected to release service sector ISM at 10:00am ET or 14:00 GMT.

Over the past 2 weeks, USD/JPY has been caught in a very tight trading range. Despite a series of higher highs and higher lows, the currency pair has been constrained between the 95 and 97 levels. Significant resistance exists right above current prices with the 10, 50 and 100 day SMA hovering around the 96.75 – 97 level. Thursday’s low of 95.70 coincides with the 200-day SMA and the 38.2 percent Fibonacci retracement of the January to April rally. Although a move below 95.60 would take USD/JPY into the “sell zone,” which we determine using Bollinger Bands, the currency pair would really need to close below 95.00 to open the door for a more meaningful sell-off. A rally above 95.70 on the other hand could pave the way for a move towards the first standard deviation Bollinger Band at 98.00.