Overview:
USD/JPY is expected to consolidate after hitting a seven-day high at 102.66 on Thursday. It is underpinned by the yen-funded carry trades amid positive risk sentiment (VIX fear gauge eased 3.72% to 12.42; S&P 500 rose 0.43% to close at 1,955.18 overnight) as geopolitical concerns over Ukraine waned. Besides, global yields fell as investors bet that major central banks will keep stimulus measures for longer after the recent batch of weak economic data from advanced economies. USD/JPY is also supported by the demand from Japanese importers. But the USD sentiment is dented by the more-than-expected 311,000 U.S. jobless claims in the week ended August 9 (versus forecast 295,000). USD/JPY upside move is also limited by Japanese export sales and lower U.S. Treasury yields (10-year last at 2.403 versus 2.420 late Wednesday) as well as positions adjustment before the weekend.
Data focus:
1230 GMT U.S. July PPI (forecast +0.2%), August Empire State manufacturing survey (forecast 20.0)
1300 GMT U.S. June Treasury international capital data
1315 GMT U.S. July industrial production (forecast +0.2%) & capacity utilization (forecast 79.1%)
1355 GMT University of Michigan preliminary U.S. August survey of consumers (forecast 82.0)
1445 GMT Fed's Narayana Kocherlakota speech.
Technical comment:
The daily chart is positive-biased as MACD and stochastics are bullish.
Trading recommendations:
The pair is trading above its pivot point. It is likely to trade in a higher range as far as it remains above its pivot point. As long as the price is keeping above its pivot point, a long position is recommended with the first target at 102.75 and the second target at 103. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 101.95. A break of this target would push the pair further downwards and one may expect the second target at 101.65. The pivot point is at 102.15.
Resistance levels:
102.75
103
103.25
Support levels:
101.95
101.65
101.40
The material has been provided by InstaForex Company - www.instaforex.com
