Fundamental overview:
USD/JPY is expected to trade in a higher range. USD/JPY is underpinned by the reduced safe-haven appeal of yen as global risk aversion subsides on news that Greece will ask for a loan-agreement extension on Wednesday. Besides, the European Central Bank claimed that it would not stop emergency funding for Greek banks this week. USD/JPY is also supported by the weaker yen sentiment after below-forecast Japan 4Q GDP growth data, higher U.S. Treasury yields (10-year at 2.145% versus 2.021% late Friday) amid speculation that the Federal Reserve could raise interest rates as soon as June and demand from Japan's importers. But USD/JPY gains are tempered by Japan's export sales; weaker dollar sentiment (ICE spot dollar index last 94.10 versus 94.43 early Tuesday) on fall in Empire State's business conditions index down to 7.78 in February from 9.95 in January (versus forecast 10.0), and surprise drop in U.S. NAHB housing market index to 55 in February from January's 57 (versus forecast for rise to 58).
Technical comment:
The daily chart is mixed as MACD is bullish, but stochastics is neutral.
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 119.50 and the second target at 119.90. In an alternative scenario, if the price moves below its pivot points, short positions are recommended with the first target at 118.60. A break of this target would push the pair further downwards, and one may expect the second target at 118.25. The pivot point is at 118.85.
Resistance levels:
119.50
119.90
120.20
Support levels:
118.60
118.25
117.95
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