USD/JPY is expected to trade in a higher range as pair is moving upwards. Overnight, the U.S. stock indices were little changed as investors remained on the sidelines awaiting the April jobs report to be released tonight. The Dow Jones Industrial Average added 9 points to 17,660, the S&P 500 was broadly flat at 2,050, and the Nasdaq Composite slid 0.2% to 4,717.
Nymex crude oil settled 1.2% higher at $44.32 a barrel, after rising as high as $46.07 earlier. Gold eased 0.1% to $1,276 a troy ounce, and the benchmark 10-year Treasury yield declined further to 1.756% from 1.786% in the previous session.
On the forex front, the U.S. dollar kept rallying against the euro and the yen as traders squared positions against the greenback ahead of the key U.S. employment data. EUR/USD lost another 0.7% to 1.1404 (a day-low at 1.1384), and USD/JPY gained 0.2% to 107.24. At the same time, USD/CHF surged 1.1% to 0.9675.
The British pound continued to fall against the dollar as the Markit/CIPS UK Services PMI dropped to 52.3 in April (vs 53.5 expected) from 53.7 in March. GBP/USD was down 0.1% to 1.4481.The pair continues on its rally with upward momentum. Currently, it is trading above the 20-period (30-minute chart) moving average. Further support is provided by the ascending 50-period moving average. Also the intraday relative strength index stays above the neutrality level of 50 lacking downward momentum. Therefore the intraday outlook remains bullish and the pair is expected to challenge the immediate resistance at 107.85. The key support was raised to 106.50.
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 107.50 and the second one, at 107.85. In the alternative scenario, short positions are recommended with the first target at 106.10 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 105.50. The pivot point is at 106.50.
Resistance levels: 107.50, 107.85, 108.75
Support levels: 106.10, 105.50, 104.70
The material has been provided by InstaForex Company - www.instaforex.com