Fundamental Overview:
USD/JPY is expected to consolidate in lower range. USD/JPY is undermined by the broadly weaker USD undertone (ICE spot dollar index last 85.76 versus 86.69 early Monday) as investors bet that the Federal Reserve will be patient in raising interest rates after focusing on the small amount of wage inflation in Friday's strong U.S. jobs report, and took profits on long-USD positions. USD/JPY is also weighed by the lower U.S. Treasury yields (10-year at 2.419% versus% 2.447% late Friday), Japan exporter sales and diminished investor risk appetite (VIX fear gauge rose 6.25% to 15.46, S&P 500 closed 0.16% lower at 1,964.82 overnight). But USD/JPY losses are tempered by the demand from Japan importers. Daily chart is tilting negative as MACD and stochastics are bearish, five-day moving average is staging bearish crossover against 15-day MA.
Technical comment:
Daily chart is negative-biased as MACD and stochastics is in bearish mode,bearish parabolic stop-and-reverse signal was hit on Thursday.
Trading recommendations:
The pair is trading below its pivot point. It is likely to trade in a lower range as far as it remains below its pivot point. Short position is recommended with the first target at 107.95. A break of this target will move the pair further downwards to 107.65. The pivot point stands at 108.80. In case the price moves in the opposite direction and bounces back from the support level, then it will move above its pivot point. It is likely to move further to the upside. In that scenario, a long position is recommended with the first target at 109.25 and the second target at 109.55.
Resistance levels:
109.25
109.55
110
Support levels:
107.95
107.65
107.35
The material has been provided by InstaForex Company - www.instaforex.com
