USD/JPY is expected to extend its upside movement. Overnight, US stocks pressed higher, lifted by bank and financial shares. The Dow Jones Industrial Average rose another 0.3% to 18096, the S&P 500 added 0.1% to 2102, and the Nasdaq Composite was up 0.2% to 4948.
Nymex crude oil surged 3.8% to a 5-month high of $42.63 a barrel, gold fell 0.5% to $1,243 an ounce, and the benchmark 10-year Treasury yield climbed to 1.850% from 1.783% in the previous session.
On the economic data front, the National Association of Realtors reported that existing home sales increased 5.1% month-on-month in March to an annual rate of 5.33 million units (vs +4.3% expected).
On the forex front, the US dollar rebounded against most other major currencies, with the Wall Street Journal Dollar Index gaining 0.4% to 86.02. EUR/USD slid 0.5% to 1.1295, USD/CHF surged 1.1% to 0.9718, GBP/USD declined 0.4% to 1.4331, and USD/JPY was up 0.6% to 109.83.
At the same time, the Canadian dollar continued to strengthen against the US dollar, with USD/CAD easing 0.1% further to 1.2653. Meanwhile, the Australian dollar and the New Zealand dollar gave back part of the gains made in the previous session, with AUD/USD declining 0.2% to 0.7793 and NZD/USD dropping 0.9% to 0.6976. The pair located a strong support around 108.75 from where it posted a powerful rebound yesterday. Currently it keeps trading on the upside while being supported by the ascending 20-period moving average, which stands above the 50-period one. And the intraday relative strength index remains above the neutrality level of 50. Although the pair may consolidate a bit at the current 6-day-high level as technical indicators suggest the bullish bias could be maintained, it is expected to challenge the immediate resistance at 110.15 (a level of key support seen on April 6).
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 110.15 and the second one, at 110.55. In the alternative scenario, short positions are recommended with the first target at 108.75 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 108.50. The pivot point is at 109.15.
Resistance levels: 110.15, 110.55, 111
Support levels: 108.75, 108.50, 108.10
The material has been provided by InstaForex Company - www.instaforex.com