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USD/JPY Stalling Ahead of the NFP Report (11/3)

USD/JPY has recently rallied from just above 118 to about 121.50. This relatively sharp and consistent rally in the second half of October appears to be a break from the prevailing choppy, consolidation, and range-bound price action for that lasted for almost 2 months.

USD/JPY Daily Chart 11/3

(click to enlarge)

The daily chart shows the break above a falling speedline, but not the consolidation high around 121.70. Therefore, let's not get too excited about the recent bullish price action. The consolidation range is still intact. Also, price has not broken above the cluster of 200-, 100-, and 50-day simple moving averages, and the daily RSI has not cleared 60. If these 2 events occur, I would be more confident of the bullish outlook.

Another confidence booster is if price holds above 120.00. If it doesn't the 4H chart would essentially show a double top. That would put the 118 handle back in play, with 116 in sight if price falls below 118.00. 

Fundamental Consideration:
The market is likely to be a bit volatile around 120. It might not be clear for a few days before the dust settles. The rally last week did come on the heel of the latest FOMC decision and statement. The market voted that this event was slightly hawkish, but it is not convincing at all. Perhaps, a little nudge from this Friday's NFP report will help the market decide whether USD/JPY has upside risk above 120 or downside risk below 120 next week.