USD/JPY is under pressure. The technical picture of USD/JPY is bearish. The pair broke below its 20-period moving average and accelerated on the downside. The downside momentum is further reinforced by its declining 50-period moving average, which also acts as a resistance role and maintains the downside bias. The RSI is bearish and has broken its 30-level. On Tuesday U.S. stock indices ended marginally higher through a session showing light trading volume. The Dow Jones Industrial Average added 3 points to 18533, the S&P 500 inched up less than 1 point to 2181, and the Nasdaq Composite rose 12 points (0.2%) to 5225, a record-high closing level. Additionally, 102 represents a key resistance level, which should limit the upside potential. As long as 102 holds on the upside, look for further drop toward 100.95 and 100.65 in extension.
Trading Recommendation:
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 100.395. A break below this target will move the pair further downwards to 100.65. The pivot point stands at 102.00. If the price moves in the opposite direction and bounces back from the support level, it will move above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 102.30 and the second one at 102.65.
Resistance levels: 102.85, 103.90, 104.60
Support levels: 101.30, 100.95, 100.65
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