Fundamental overview:
USD/JPY is expected to consolidate. USD/JPY is undermined by the weaker USD sentiment (ICE spot dollar index last 85.01 versus 85.31 early Monday) as U.S. Treasury yields inched lower (10-year at 2.192% versus 2.199% late Friday) and Japan's export sales. But USD/JPY downside is limited by the demand from Japanese importers, ultra-loose Bank of Japan monetary policy, yen-funded carry trades amid the positive investor risk sentiment (VIX fear gauge eased 15.55% to 18.57; S&P 500 closed up 0.91% at 1,904.01 Monday).
Technical comment:
Daily chart is mixed as MACD is bearish but stochastics is rising from oversold.
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 107.55 and the second target at 108.15. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 106.05. A break of this target would push the pair further downwards and one may expect the second target at 105.70. The pivot point is at 107.05.
Resistance levels:
107.55
107.85
108.15
Support levels:
106.05
105.70
105.50
The material has been provided by InstaForex Company - www.instaforex.com
