The USD/JPY pair declined sharply to 116.13 in last week’s trading session after China’s stock crashed causing profound volatility in the market. The pair then drew support from 115.55/116.38 (38.2% retracement of 101.08 to 125.85 at 116.38) and rebounded strongly. Price actions pattern from this demand zone will bring initial bias initially to the upside. More rise is expected to 123.89/124.14 resistance first. However we’d expect strong resistance above 61.8% retracement of 125.27 to 116.13 at 119.62 and bring another fall. Below 119.78 minor support will turn bias to the downside for 115.55/116.38 support again.
Later in the week all eyes would be upon U.S data such as ISM Manufacturing PMI, ADP Non-Farm Employment Change, Non-Farm Employment Change and Unemployment Rate. Outcome of this data would determine if the Feds are going to be hiking Interest Rate in the month of September.