USD/JPY is expected to trade with a bullish bias. US indices closed higher on Wednesday led by shares in the energy (+2.45%), banks (+1.67%) and telecommunication services (+1.06%) sectors. The Dow Jones Industrial Average added 0.2% to 16899.3, the S&P 500 rose 0.4% to 1986.4, and the Nasdaq Composite gained 0.29% to 4703.4.
On the economic data front, MBA mortgage applications fell 4.8% in the week ended Feb. 26th after falling 4.3% in the prior week. ADP says private sector companies in the US added 214,000 workers in Feb, following a revised 193,000 rise in the prior month.
Nymex crude oil rose 0.8% to $34.66 a barrel, while gold gained 0.9% to $1,241.80 an ounce. The yield on the 10-year Treasury note rose to 1.848% from 1.835% yesterday. U.S. dollar was flat ahead of Friday's jobs report. The pair has been well supported by its rising 20-period and 50-period moving averages and remains on the upside. The intraday RSI still stands above 50. Further upside is therefore expected with the next horizontal resistance and overlap set at 114.50 at first. A break above this level would call for further advance toward 114.85 in extension.
Trading Recommendation:
The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 114.50 and the second one at 114.85. In the alternative scenario, short positions are recommended with the first target at 112.85 if the price moves below its pivot points. A break of this target is likely to push the pair further downwards, and one may expect the second target at 112.50. The pivot point is at 113.20.
Resistance levels: 114.50, 114.85, 115.25
Support levels: 112.85, 112.50, 112.15
The material has been provided by InstaForex Company - www.instaforex.com